Macquarie reports growth in wealth management business

Macquarie Group has announced the continued expansion of its Macquarie Wrap managed accounts offering, with funds under administration of $11.8 billion at 30 September 2023, up from $10.5 billion at 31 March 2023.

The banking giant further recorded funds on the platform of $125.1 billion, up 2 per cent on the prior period, with net flows of $1.7 billion logged.

Overall, Macquaire posted a net profit after tax of $1.4 billion for 1H24, down 51 per cent on 2H23.

However, the group recorded assets under management (AUM) of $892 billion, climbing 2 per cent from $878.6 billion in March.

Macquarie attributed the AUM increase to investments made by Macquarie Asset Management (MAM) private markets-managed funds and favourable foreign exchange movements, partially offset by a reduction of co-investment management rights in MAM private markets.

Moreover, annuity-style activities, which are undertaken by MAM, Banking and Financial Services (BFS) and certain businesses in Commodities and Global Markets (CGM), generated a combined net profit contribution of $1.3 billion, down 43 per cent on 1H23 and 30 per cent on 2H23.

However, BFS on its own delivered a net profit contribution of $638 million, up 10 per cent from $580 million in 1H23.

This result, according to the group, was driven by growth in the loan portfolio and BFS deposits and improved average margins, although was partially offset by higher credit impairment charges, higher costs due to increased headcount and technology investment, and inflationary pressure.

Macquarie Group managing director and chief executive, Shemara Wikramanayake, said: “Our annuity-style businesses saw growth in loan books, deposits and assets under management, but the first-half result was substantially down compared to a strong period of realisations in the prior corresponding period, with an expectation that green energy realisations will be predominately in the second half.

“Our markets-facing businesses delivered solid performances despite lower market activity and volatility levels, with growth in the CGM client base and Macquarie Capital’s private credit book partially offsetting lower equity realisations.”

Shareholders will receive an interim ordinary dividend of $2.55 per share which is 40 per cent franked, down from a dividend of $3.00 per share in 1H23 and $4.50 in 2H23.

However, Ms Wikramanayake was optimistic that the firm would deliver in the medium term.

“Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing technology and regulatory spend to support the group; a strong and conservative balance sheet; and a proven risk management framework and culture,” she said.