Presentation to investors and analysts Result announcement for the full year ended 31 March 2015 8 May 2015
Agenda 1 Introduction Karen Khadi 2 Overview of Result Nicholas Moore 3 Result Analysis and Financial Management Patrick Upfold 4 Outlook Nicholas Moore 5 Appendices PAGE 3
1 Introduction Karen Khadi - Head of Investor Relations
2 Overview of Result Nicholas Moore - Managing Director and Chief Executive Officer
About Macquarie Building for the long term Macquarie Asset Top 50 global asset manager with A484.0b1 of assets under management Management (formerly Provides clients with access to a diverse range of capabilities and products, including…
2H15 Result A926m Net profit A926m, up 37% on 1H15 and up 21% on 2H14 Operating income A5.0b, up 16% on 1H15 and up 12% on 2H14 As foreshadowed: Macquaries annuity-style businesses (Macquarie Asset Management, Corporate and Asset…
FY15 Result A1,604m Net profit A1,604m, up 27% on FY14 Operating income A9.3b, up 14% on FY14 As foreshadowed: Macquaries annuity-style businesses (Macquarie Asset Management, Corporate and Asset Finance, and Banking and Financial…
FY15 Result 2H15 1H15 FY15 FY14 FY15 v Am Am Am Am FY14 Net operating income 4,995 4,298 9,293 8,132 14% Total operating expenses (3,594) (3,177) (6,771) (6,026) 12% Operating profit before income tax 1,401 1,121 2,522 2,106 20%…
Financial performance FY15 Operating income of A9,293m FY15 Profit of A1,604m Am Am FY15 up 14% on FY14 FY15 up 27% on FY14 6,000 1,000 2H15 up 16% on 1H15 2H15 up 37% on 1H15 5,000 750 4,000 500 3,000 250 - 2,000 1H13 2H13 1H14…
Assets under management of A486.3 billion1 AUM increased A59.4b or 14% since 31 Mar 14, largely due to: additional investments, favourable currency and market movements partially offset by asset disposals, formation of the JSP joint…
Diversification by region International income 70% of total income1 Total staff 14,085; International staff 54% of total Europe, Middle East & Africa Asia Americas Income: A2,013m (22% of total) Income: A1,131m (12% of total) Income:…
Diversification by region 70% of income1 in FY15 was generated offshore A 10% movement2 in AUD is estimated to have approx. 7% impact on full year NPAT Ab 3,500 3,000 2,500 2,000 1,500 1,000 500 -0 Australia Asia Americas…
Macquarie Asset Management Operating income of A2,447m, up 27% on prior year Net profit contribution of A1,450m, up 38% on prior year AUM of A484.0b1 up 14% on prior year Macquarie Infrastructure and Real Assets Macquarie Investment…
Corporate and Asset Finance Operating income of A1,594m, up 32% on prior year Net profit contribution of A1,112m, up 35% on prior year Asset and loan portfolio of A28.7b1 up 13% on prior year Lending Asset Finance Lendings funded loan…
Banking and Financial Services Operating income from continuing operations1 of A1,345m, up 10% on prior year Net profit contribution of A285m, up 10% on prior year Australian client numbers 1.1 million Personal Banking Wealth Management…
Macquarie Securities Operating income of A918m, up 6% on prior year Net profit contribution of A64m, down from A107m in prior year Cash Derivatives and Trading ECM activity remained strong in Australia Favourable market conditions in…
Macquarie Capital Operating income of A1,054m, up 29% on prior year Net profit contribution of A430m, up 54% on prior year 470 transactions valued at A141b in FY15 (482 transactions valued at A94b in FY14)1 Market Conditions2 Australia…
Commodities and Financial Markets Operating income of A1,831m, up 9% on prior year Net profit contribution of A835m, up 15% on prior year Commodity Markets (Physical & Financial) Financial Markets (Primary & Secondary) 62% of operating…
Strong funding and balance sheet position Diverse and stable funding base, minimal reliance on short term wholesale funding markets Retail deposits1 continuing to grow, up 12% to A37.3b at Mar 15 from A33.3b at Mar 14 Long term funding…
Funded balance sheet remains strong Ab Ab Ab 120 31 March 2014 120 30 September 2014 120 31 March 2015 110 110 110 ST wholesale issued paper (11%) 100 100 100 Other debt maturing in the next ST wholesale issued paper 12 mths 1 (8%)…
Regulatory update In Aug 14, APRA issued its final rules for Conglomerates with the implementation timing dependent on the outcomes of the Financial System Inquiry. We continue to work through the application of the rules with APRA and…
Basel III capital position APRA Basel III Group capital at Mar 15 of A16.1b, Group surplus of A2.7b (1 Jan 16 requirements1) Bank Group APRA Basel III CET1 ratio: 9.7%; Tier 1 ratio: 11.0% Bank Group Harmonised Basel III CET1 ratio:…
Final dividend FY15 ordinary dividend set at A3.30, 68% payout ratio, up on FY14 ordinary dividend of A2.60 2H15 ordinary dividend A2.00 (40% franked) up on 1H15 ordinary dividend of A1.30 (40% franked) Record date for 2H15 ordinary…
3 Result Analysis and Financial Management Patrick Upfold - Chief Financial Officer
Income Statement key drivers 2H15 1H15 FY15 FY14 Net interest and trading income of A3,819m, up 17% on FY14 Am Am Am Am Increased lending activity in CAF and BFS Net interest and trading income 2,176 1,643 3,819 3,275 Improved trading…
Macquarie Asset Management Result FY15 FY14 Base fees of A1,372m, up 9% on FY14 (AUM up 14%) Am Am MIM net inflows into higher fee earning products and positive market Base fees 1,372 1,262 movements, partially offset by impact of…
Corporate and Asset Finance Result FY15 FY14 Net interest and trading income of A737m, up 11% on FY14 Am Am Strong performance in Lending driven by underlying portfolio growth and Net interest and trading income1 737 663 realisations…
Banking and Financial Services Result FY15 FY14 Net interest and trading income of A825m, up 12% on FY14 Am Am Continued growth in Australian mortgages partially offset by Canadian and Net interest and trading income1 825 738 US…
Macquarie Securities Result FY15 FY14 Brokerage and commissions of A542m, broadly in line with FY14 Am Am Higher brokerage and commissions in Australia and Europe and favourable Brokerage and commissions 542 547 foreign exchange…
Macquarie Capital Result FY15 FY14 Fee and commission income of A860m, up 18% on FY14 Am Am Increased fee income across all product classes (M&A, ECM, DCM) Fee and commission income 860 727 US largest contributor with strong growth in…
Commodities and Financial Markets Result FY15 FY14 Commodities income of A1,125m, broadly in line with FY14 Am Am Risk management products increased client activity across the platform Commodities1 1,125 1,124 primarily driven by…
Provisions for impairment Am 400 Collective allowance for credit losses Individually assessed provisions and write-offs Non-financial assets Investments (AVS and associates) 350 300 250 200 150 100 50 0- FY14 FY15 FY14 FY15 FY14 FY15…
Costs of compliance increase in response to ongoing regulatory changes The industry is seeing a continuing increase in regulatory initiatives, resulting in increased compliance requirements across all levels of the organisation…
Balance sheet highlights Balance sheet remains solid and conservative Term assets covered by term funding, stable deposits and equity Minimal reliance on short term wholesale funding markets Cash and liquid assets exceed all forecast…
Well diversified funding sources Diversity of MGL funding sources MGL term funding beyond one year Equity and Wholesale (including equity and hybrids) hybrids issued paper 13% 11% Deposits - Ab Loan capital corporate 4% 25 and…
Continued retail deposit1 growth Macquarie has been successful in pursuing its strategy of diversifying its funding sources through growing its deposit base In excess of 1.1 million retail clients, of which approx. 600,000 are…
Loan portfolio1 growth Funded Balance Sheet Mar 15 Mar 14 Balance predominately relates to the financing of Predominately financing oil Category Ab Ab gold producers. Positions well secured and producers. Positions well secured;…
Equity investments of A4.4b1 Carrying value2 Carrying value2 Mar 15 Mar 14 Category Am Am Description Macquarie Asset Management (MIRA) 1,479 1,528 Includes Macquarie Infrastructure Company, MPF Holdings Limited, managed funds…
Bank Group Basel III Common Equity Tier 1 (CET1) Ratio Harmonised Basel III CET1 ratio: 11.4%1 APRA Basel III CET1 ratio: 9.7%2 Bank Group CET1 Ratio: Basel III (Mar 15) 12% 0.6% (0.5%) (0.9%) 1.4% 11.4% (1.7%) 10% 10.8% 9.7% 8%…
Net assets per share A 45.00 Net tangible assets per share Net assets per share 40.00 1.17 41.68 3.22 38.19 35.00 2.09 35.51 30.00 31.71 25.00 20.00 31 Mar 14 Retained earnings Movement in reserves Net impact of capital…
Capital management update The Board has resolved1: To purchase shares on-market2 to satisfy the MEREP requirements of approx. A390m. The buying period for the MEREP will commence on 18 May and is expected to be completed by 10 Jul3 No…
4 Outlook Nicholas Moore - Managing Director and Chief Executive Officer
Short term outlook Summarised below are the outlook statements for each Operating Group FY16 results will vary with market conditions, particularly the capital markets facing businesses Net profit contribution FY08FY15 FY08FY15…
Short term outlook While the impact of future market conditions makes forecasting difficult, we currently expect the FY16 combined net profit contribution1 from operating groups to be broadly in line with FY15 The FY16 tax rate is…
Medium term Macquarie remains well positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions…
Approximate business Basel III Capital & ROE 1 APRA Basel III Capital Approx. FY15 Return Approx. 9-Year average Return 2 Operating Group 8.5% (Ab) on Ordinary Equity2 on Ordinary Equity Annuity-style businesses 7.5 Macquarie Asset…
Medium term Annuity-style business that is diversified across regions, products, asset classes and investor types Diversification of capabilities allows for the business to be well placed to grow assets under management in different…
A Additional information Funding
Group funding structure MGL and MBL are the Groups two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements MBL provides funding to the Bank Group MGL provides…
Funded balance sheet reconciliation The Groups statement of financial position is prepared based on generally accepted accounting principles which do not represent actual funding requirements A funded balance sheet reconciliation has…
Funding for the Group Mar 15 Mar 14 Ab Ab Well diversified funding sources Funding sources Negotiable certificates of deposits 1.4 1.9 Minimal reliance on short term wholesale funding markets Commercial paper Net trade creditors…
Funding for the Bank Group Mar 15 Mar 14 Ab Ab Bank balance sheet remains liquid, well capitalised and Funding sources Negotiable certificates of deposits 1.4 1.9 with a diversity of funding sources Commercial paper 11.1 6.6 Term…
Funding for the Non-Bank Group Mar 15 Mar 14 Ab Ab Non-Bank Group is predominately term funded Funding sources Term funding beyond one year (excluding equity) has a Net Trade Creditors 0.1 0.3 Structured notes 0.5 0.7 weighted…
Explanation of Funded Balance Sheet reconciling items Self funded trading assets: Macquarie enters into stock borrowing and lending as well as repurchase agreements and reverse repurchase agreements in the normal course of trading…
Conservative long standing liquidity risk management framework Liquidity Policy The key requirement of MGL and MBLs liquidity policies is that the entities are able to meet all liquidity obligations during a period of liquidity stress:…
B Additional information Capital
Macquarie Group Basel III regulatory capital Surplus calculation Harmonised APRA Basel III Basel III 31 March 2015 Am Am Macquarie Group eligible capital: Bank Group Gross Tier 1 capital 12,297 12,297 Non-Bank Group eligible…
Macquarie Group APRA Basel III regulatory capital Bank Group contribution Risk-weighted assets Tier 1 Deductions Capital Requirement1 31 March 2015 Am Am Am Credit risk On balance sheet2 47,074 3,295 Off balance sheet 20,880…
Macquarie Group regulatory capital Non-Bank Group contribution APRA has specified a regulatory capital framework for MGL A dollar capital surplus is produced; no capital ratio calculation is specified APRA has approved Macquaries…
Macquarie Group regulatory capital Non-Bank Group contribution Capital Assets Requirement Equivalent Risk 31 March 2015 Ab Am Weight Funded assets Cash and liquid assets 1.9 30 20% Loan assets1 1.2 127 133% Debt investment…
C Glossary
Glossary A / AUD Australian Dollar BIS Bank for International Settlements C Canadian Dollar CAF Corporate and Asset Finance US / USD United States Dollar CCB Capital Conservation Buffer British Pound CET1 Common Equity Tier 1 Euro CFM…
Glossary EPS Earnings Per Share LCR Liquidity Coverage Ratio FUA Funds Under Administration LNG Liquefied Natural Gas FUM Funds Under Management LP Limited Partner FX Foreign Exchange Ltd Limited FY07 Full Year ended 31 March 2007 M&A…
Glossary MIRA Macquarie Infrastructure and Real Assets SBI State Bank of India MPW Macquarie Private Wealth SGX Singapore Exchange MQA Macquarie Atlas Roads SME Small and Medium Enterprise MSG Macquarie Securities Group ST Short Term Mths…
Presentation to investors and analysts Result announcement for the full year ended 31 March 2015 8 May 2015
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