2017 in review


Year ended 31 March 2017

CEO overview

Macquarie Group full year result to 31 March 2017 06:02
Macquarie Group FY17 result announcement

05 May 2017
Macquarie Group

Nicholas Moore, Macquarie Group CEO and Managing Director, discusses the group’s result for the full year ended 31 March 2017.

63%

international income

13,500+ staff

in 27 countries

~$A482 billion

assets under management

15.2%

return on equity

Operating group highlights

Macquarie Asset Management

Top 50 global asset manager with approximately $A480 billion of assets under management. 

Net profit contribution of $A1,538 million, down 6% on prior year.

Highlights of the year:

  • assets under management broadly in line with March 2016
  • raised $A15.6 billion in new equity globally for infrastructure and real asset investments
  • invested equity of $A13.7 billion in infrastructure, real estate and agriculture globally
  • strong performance across a range of asset classes including Australian equities, emerging markets equities, US real estate securities, as well as affiliated managers
  • continued to grow the Macquarie Infrastructure Debt Investment Solutions business
  • named Infrastructure Manager of the Year by Global Investor magazine and ranked first in equity raised for infrastructure over the past five years by Infrastructure Investor magazine
  • received four Lipper awards and named Overall Fund Manager of the Year at the Money Management/Lonsec Awards. 

Read more about Macquarie Asset Management

On 31 March 2017, a consortium of long-term infrastructure investors led by Macquarie Infrastructure and Real Assets acquired a 61 per cent shareholding in four gas distribution networks in the UK which have a regulated asset value of approximately £9 billion. The networks distribute gas to approximately half of the UK’s connected households through 130,000 kilometres of gas pipeline.

The transaction is part of a broader strategic initiative to source competitive capital to pursue lower risk, high yielding assets at market returns which are currently outside the investment mandate of Macquarie’s regional flagship funds.

Corporate and Asset Finance

Manages an asset and loan portfolio of over $A36 billion, specialising in corporate and real estate lending and asset financing. 

Net profit contribution of $A1,198 million, up 6% on prior year.

Highlights of the year: 

  • motor vehicle portfolio of $A17.4 billion
  • AWAS aircraft and Esanda motor vehicle dealer finance acquisitions successfully integrated and continue to perform in line with expectations
  • more than 300,000 motor vehicle lease contracts successfully migrated during the year following the Esanda acquisition
  • aircraft leasing portfolio of $A8.5 billion
  • largest deregulated traditional and smart meter provider in the UK
  • lending portfolio of $A6.8 billion, with portfolio additions of $A1.9 billion during the year.

During the second half of 2016, Macquarie entered into a competitive bid process to acquire a portfolio of loans secured by aircraft assets. The seller was a European bank focused on selling their non-core assets, which included the aircraft loan portfolio.

Macquarie was the successful bidder for the aircraft loan portfolio in January 2017 and closed the transaction in April 2017.

The aircraft loan portfolio is comprised of 16 individual borrowers and is secured by 43 underlying passenger aircraft.

Banking and Financial Services

Macquarie’s retail banking and financial services business, providing a range of personal banking, wealth management and business banking products and services. 

Net profit contribution of $A513 million, up 47% on prior year.

Highlights of the year: 

  • more than 1 million Australian clients
  • 10 per cent increase in total BFS deposits to $A44.5 billion
  • $A28.7 billion Australian mortgage portfolio, representing approximately 2 per cent of the Australian mortgage market
  • $A72.2 billion of funds on platform
  • 10 per cent increase in business banking loan portfolio since March 2016
  • launched Apple Pay for customers as part of leading digital banking experience
  • successful migration of the ANZ Oasis wrap super and investment assets onto Macquarie’s platforms
  • awarded iSelect’s 2016 Home Loans Partner of the Year for the third year in a row.2

Read more about Banking and Financial Services

In February 2017, Macquarie launched Apple Pay to offer Macquarie debit and credit cardholders an easy, secure and convenient way to make payments using their Apple devices.

Macquarie has built a highly personalised and intuitive new digital banking offering with features that are firsts of their kind in Australian banking. The introduction of Apple Pay marks the latest step in Macquarie’s approach of supporting innovative digital solutions for customers. In 2016, Macquarie was also one of the first financial institutions in Australia to launch Android Pay.

Commodities and Global Markets

Provides clients with an integrated, end-to-end offering across global markets.  

Net profit contribution of $A971 million, up 15% on prior year.

Highlights of the year: 

  • strong results for the energy platform, particularly from global oil and North American gas
  • increased client activity in precious metals, driven by producer hedging as Canadian and Australian dollar gold prices increased
  • increased customer activity in foreign exchange, interest rates and futures markets due to ongoing market volatility
  • increase in investment-related income generated from the sale of equity investments and a reduction in provisions for impairment in comparison to the prior year
  • Equities down on a strong prior year which benefited from strong equity market activity, particularly in China
  • no. 4 US physical gas marketer in North America – the highest ranked non-producer3
  • 2016 Commodity House of the Year – third consecutive year.4

Read more about Commodities and Financial Markets

In November 2016, Macquarie announced the merger of two of its three capital markets facing businesses: Macquarie Securities Group and Commodities and Financial Markets to form Commodities and Global Markets.

The merger brings together our highly regarded execution, research, derivatives, trading, fixed income, foreign exchange and commodities businesses to provide clients with an integrated, end-to-end offering across global markets.

The group specialises in providing clients with access to markets, financing, financial hedging, research and market analysis, and physical execution across energy; metals, mining and agriculture; fixed income and currencies; credit; futures and equity markets.

With a diverse platform covering more than 25 market segments and over 160 products that has evolved over more than three decades, Commodities and Global Markets leverages its deep market knowledge to provide tailored solutions for clients.

Macquarie Capital

Global capability in Mergers and Acquisitions advisory (M&A), Debt and Equity Capital Markets and Principal Investments. 

Net profit contribution of $A483 million, up 7% on prior year.

Highlights of the year:

  • advised on 417 transactions valued at $A159 billion
  • no. 1 in M&A and initial public offerings in Australia and New Zealand5
  • exclusive financial adviser to AustralianSuper and IFM on the acquisition of a 50.4 per cent interest in the 99-year lease of Ausgrid
  • joint lead manager, joint bookrunner and joint underwriter to Boral Limited’s ~$A2.1 billion equity raising to partially fund its acquisition of Headwaters Incorporated
  • partnered with China Jinmao to establish JM Capital, a real estate investment platform managing domestic and international capital in the People’s Republic of China
  • financial adviser and debt arranger to a group of North American infrastructure investors on the acquisition of Cleco Corporation
  • acquisition of a 25 per cent stake in the £1.6 billion Race Bank offshore wind farm and adviser to Macquarie Infrastructure and Real Assets on the acquisition of a 25 per cent stake in the project. 

Read more about Macquarie Capital

In 2015, Macquarie Capital acquired a 25 per cent stake in the £1.5 billion Galloper offshore wind farm project off the coast of Suffolk in the UK, alongside Innogy (formerly RWE), Green Investment Bank and Siemens. Macquarie Capital sold down half of its position in August 2016 to Sumitomo and continues to provide asset advisory services to the investment vehicle through which Macquarie Capital and Sumitomo have invested in the asset.

The Galloper offshore wind farm project is scheduled to be fully operational in 2018, generating enough power for up to 336,000 homes.

The transaction represents Macquarie Capital’s first construction phase offshore wind investment and the first investment in a UK offshore wind farm asset.

2017 Annual Report

The Annual Report contains the Operating and Financial Review, Corporate Governance Summary, Macquarie Group Foundation Review, Diversity Report, Risk Management Report, Environmental Social and Governance Report, Directors’ Report including the Remuneration Report and full financial statements for Macquarie Group for the financial year ended 31 March 2017.

Additional information

Annual General Meeting

The 2017 Annual General Meeting will be held at 10:30am on Thursday, 27 July 2017 at the Sofitel Melbourne on Collins, 25 Collins Street, Melbourne. 

Investor information

Key dates

16 May Ex-dividend date for final ordinary dividend
17 May Record date for final ordinary dividend
3 July Final ordinary dividend paid
27 July  Annual General Meeting

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