Macquarie surging towards record year
THE “millionaire’s factory”, Macquarie Group, is living up to its moniker, unveiling a first-half profit that puts it on track for a record full-year result.
Macquarie yesterday posted a net profit of $1.07 billion for the six months to September – itself a record tally that is up 58 per cent on the same period a year earlier.
The investment bank said it had benefited from increased trading activity amid volatile markets, a weaker Australian dollar and a rise in fee revenue in its asset management arm.
As a result, it said it expected to eclipse last financial year’s net profit of $1.6 billion.
Even a moderate secondhalf performance would see Macquarie skip past its fullyear record of $1.8 billion, achieved in 2008 on the eve of the financial crisis.
Chief executive Nicholas Moore said the group’s conservative risk management approach had served it well, noting the short-term outlook hinged on factors including market conditions and the cost of capital.
The group was well placed to deliver a “superior performance in the medium term”, Mr Moore said, citing its “deep expertise in major markets, strength in diversity and ability to adapt our portfolio mix to changing market conditions”.
The lower dollar, which has fallen about 6.5 per cent against the greenback in the six months to September, proved a boon for the com- pany, which makes much of its earnings offshore.
Macquarie’s assets under management rose 4 per cent for the period to $504 billion.
Shareholders were pleased, sending the group’s stock up 2 per cent to $85.70.
The group, which is exposed to the Australian property market through its lending arm, has also moved to bolster its books in response to a campaign from the banking regulator.
Macquarie tapped its investors for $500 million in March and changed its home loan prices in May – effectively charging property investors more than owner-occupiers – in an effort to curb lending growth to investors.
Macquarie’s investment property lending grew 66 per cent in the year to September, figures from the Australian Prudential Regulation Authority reveal, albeit off a smaller base than that of the big four lenders.
CMC Markets strategist Michael McCarthy said Macquarie’s exposure wouldn’t concern APRA, given its entire mortgage portfolio of $27.6 bil- lion represented just 1.8 per cent of the nation’s home loan market.
Macquarie said it had amassed $16.9 billion in toptier capital as of September 30, some $3.1 billion more than required by APRA from 2016.
It declared a partially franked interim dividend of $1.60 a share, which was up 30c on a year earlier.