International growth continues to drive Macquarie Bank result

14 November 2006

Macquarie Bank today reported its first half results for the six months ended 30 September 2006, achieving a 51% increase in profit with all operating Groups reporting record contributions. The result was again strongly supported by growth in international activities, which increased 38% on the prior corresponding period and accounted for 44% of the Bank’s operating income (excluding earnings on capital).

The Bank reported an after-tax profit of €429 million for the half year ended 30 September, an increase of 51% over the half year ended 30 September 2005. Total assets grew by 34% to €66.2 billion and assets under management increased 37% to €90.2 billion.¹

With €26.5 billion in assets under management, Europe, Africa and the Middle East now account for 46% of specialised assets under management, an increase of 142% over 30 September 2005.

Income from Macquarie’s European, African and Middle Eastern activities was €269 million, up 3% against exceptional growth in the same period last year and representing 35% of total international income.

According to Jim Craig, Head of the Macquarie Bank Group in Europe, the past six months has seen the Bank’s European activities grow in new areas with an increasing focus on treasury and commodities and real estate activities.

 “In Europe, as in other markets, our strategy is to focus on select markets where we believe we bring specialist expertise. Over the past six months we have reinforced our presence in corporate finance and specialist funds management, as well as building on the foundations of other businesses now established in Europe – notably treasury and commodities and real estate,” Mr Craig said.

In the investment banking business, transactions such as Dyno Nobel and the Bank’s role as co-adviser to the Grupo Ferrovial acquisition of BAA have resulted in a strong contribution to the overall result. 

The Macquarie European Infrastructure Fund II, which had its first close in May 2006, has now reached €2.1 billion in investor’s commitments, with an overall target of €3 billion. 

The Treasury and Commodities business moved into the physical commodities markets, with the acquisition of Corona Energy.

Macquarie Real Estate has established a London-based team to pursue the opportunities arising from the introduction of REIT style legislation in the UK and the proposed introduction of similar legislation in Germany.

Macquarie’s Italian mortgages business continued to grow solidly, receiving strong support among Italian home buyers for its innovative, flexible products and direct sales approach.

“While the advisory and funds management business continue to perform well, we are now building our presence from a solid base of specialised businesses which are focused on adding value for clients and investors,” Mr Craig said. 

Highlights in European activities included:

• Establishment of the Macquarie European Infrastructure Fund II, with raisings totalling €2.1 billion to date
• Co-advisor to the Grupo Ferrovial on market takeover of BAA
• Acquisition by a Macquarie Bank-led consortium of UK roadside catering service, Moto
• The acquisition of the London bus business of Stagecoach Group plc
• The acquisition of the UK gas supply company, Corona Energy
• The acquisition by a consortium led by Global Infrastructure Fund II, of Itevelesa in Spain
• Refinancing of M6 toll and commitment to reinvest in roads in the West Midlands
• Advisor to Lundin Mining on proposed merger with EuroZinc Mining Corporation
• Post balance date:
  • The acquisition of Thames Water by a consortium including Macquarie Bank, Macquarie’s European Infrastructure Funds and other institutional investors
  • The sale of South East Water
  • Macquarie European Infrastructure Fund announced a cash offer for Techem of €44.00 per share, representing total equity value of €1.1 billion

¹ Conversions from Australian dollars made using the rate for 29/9/06 of AUD 1 = EUR 0.587979

About Macquarie Bank

Macquarie Bank Limited is a diversified international provider of specialist financial and investment banking services. Macquarie has more than 8,900 employees in 24 countries and is present in every major financial centre around the world.

Macquarie’s approach is driven by a deliberate focus on areas of business where its specialist skills and expertise deliver a real advantage for clients, partners and investors. As a result, Macquarie has established leading positions in a diverse range of market segments internationally.

Macquarie Bank evolved from Hill Samuel Australia Limited, which was established in 1969 as a subsidiary of the UK merchant bank, Hill Samuel and Co.  In 1985, it acquired a banking licence and began operations as Macquarie Bank.  Listed on the Australian Stock Exchange since 1996, Macquarie has a market capitalisation of more than €10 billion. The Company is rated A by Standard and Poors and A2 by Moody’s.

Macquarie’s European head office is in London, with nine other offices across Europe in Dublin, Frankfurt, Geneva, Munich, Milan, Paris, Rome, Vienna and Zurich.

For further information, please contact:

Karen Smith
Corporate Communications Manager
Macquarie Bank
Tel: (44) (0) 20 7065 2420