Macquarie Group Limited (MQG) Earnings Call Transcript & Summary

Macquarie Group has announced a net profit after tax of $3.7 billion for the year ended 31 March 2025, up 5% on last year. 66% of income was earned outside Australia. The group declared a final ordinary dividend of $3.90 per share, contributing to a full year dividend of $6.50.

Shemara, thanks for joining us.

Can you tell us about Macquarie's performance in FY '25?

Yes. Thanks, Laura. You will have seen from the results that we had a pleasing 5% increase in earnings compared to the previous year. And particularly given the macroeconomic and market environment that was prevailing at the end of the year and the fact that our accounts had to take account of that, it was great to see that we were able to still report a good increase and particularly that that increase reflected growth in our franchise. So our annuity-style income was 54% of the earnings, but with our European investor tour earlier this year, we evolved the way we articulate our business so that we reflect more the recurrent nature of income in areas like performance fees in Macquarie Asset Management and our risk management earnings that we have revenues from our clients in commodities. And so only 17% of our earnings was true market-facing. The remaining 29% was in this middle bucket. So all up, a very pleasing result in terms of reflecting quality of earnings and growth.

And what drove the result in each of our 4 operating groups?

Yes. Well, starting with Banking and Financial Services, which is our Australia-only business, that continued its trajectory of growth that we've had for many years from the world-leading digital banking offering that it brings with a focus on customer experience. And that saw our loan book across the home loans and the business banking book grow 17% in aggregate, and that was supported by a 21% growth in deposits, really high-quality deposits, very resilient business as we continue to grow that digital banking offering. Then in terms of our 3 global businesses, Macquarie Asset Management, also a pleasing step up. BFS was up 11%, Macquarie Asset Management up 33%. Now towards the end of the year, we announced the partnership that we've entered into with Nomura who will now take our non-Australian public investments business, and we can continue to have access to it to bring it to our clients as they can take our private markets offering to their clients. And then in the private markets business, we had, again, ongoing underlying organic growth in that $18 billion plus of new raisings, $25 billion plus of investments and across a range of real asset strategies. So good results from Macquarie Asset Management. And then turning to Commodities and Global Markets. That business was down 12% on the year before but mostly through timing of income recognition in things like inventory management. The underlying earnings, we had growth in asset finance, growth in financial markets. And in the commodities business, that's where we had that timing of income recognition impact, but the underlying franchise continuing to grow well in terms of regions, clients, et cetera. And then Macquarie Capital, broadly in line with last year. And the main features there where we saw better market activity, so revenues were up in our advisory business, in our capital markets business, but in our principal investing business where we bring our balance sheet behind, where we have deep expertise, the earnings can be lumpy depending on timing of realizations. The earnings were lower than last year, but we found it a good year to invest more in our areas of deep expertise and grow our book. And as that seasons, we gradually should get good repeat earnings out of those businesses as well.

And how is the business position moving forward in what is still an uncertain economic and market environment?

Yes. Well, still, it's become even more so, I think, in terms of the backdrop of the macroeconomic and market uncertainty. And that's why I think we're particularly well positioned in terms of the long-term position we maintain of good capital surpluses, terming out our funding, strong liquidity through all cycles but particularly in an environment like this and especially with some of the realizations we had at the end of last year with our public investments, which will close this year, and the Rotorcraft sale. We are strongly positioned for what could be a challenging environment, but even more so, the diversity of capabilities and expertise we have across our people in all the regions and sectors in which they operate, when these times of change happen, allows them to spot the opportunity and reposition our business to capture that. So I think whilst we remain realistic about the volatile environment and the heightened uncertainty, we also remain positive about the opportunities that our teams have historically been able to find for the medium term in times like this.

Shemara, thanks so much for joining us.