Interim Review


Half year ended 30 September 2016

CEO overview

Macquarie Group half-year result 04:30
Macquarie Group half-year result

28 Oct 2016
Macquarie Group

Macquarie Group CEO Nicholas Moore discusses the result for the half year ended 30 September 2016.

~60%

international income

13,800+ staff

in 27 countries

$A493 billion

assets under management

14.6%

annualised return on equity

Operating group highlights

Macquarie Asset Management

Top 50 global asset manager with over $A491 billion of assets under management. 

Net profit contribution of $A857 million, down 25% on 1H16 and up 70% on 2H16. 

Highlights of the half year:

  • 3% increase in assets under management since 31 March 2016
  • raised $A7.4 billion in new equity globally for infrastructure and real asset investments
  • invested $A3.4 billion in infrastructure, real estate and agriculture globally
  • strong performance across a range of asset classes including Australian equities and Emerging Markets equities, as well as affiliated managers
  • continued to grow the Macquarie Infrastructure Debt Investment Solutions platform
  • named Infrastructure Manager of the Year by Global Investor magazine and ranked No.1 infrastructure manager globally by Willis Towers Watson (2016 Global Alternatives Survey)
  • named Overall Fund Manager of the Year at the Money Management/Lonsec Awards.

Read more about Macquarie Asset Management

Macquarie Investment Management was named 2016 Money Management/Lonsec Fund Manager of the Year. This prestigious award, along with three individual fund awards, highlights the significant achievements and strong performance of the investment teams in the business.

The Macquarie High Conviction Fund won the Australian Equities (Broad Cap) award, the Macquarie Professional Series IFP Global Franchise Fund was awarded the Global Equites (Broad Cap) title and, for the third consecutive year, the Macquarie Asia New Stars No.1 Fund won the Global Equities (Regional Emerging) award.

Corporate and Asset Finance

Asset and loan portfolio of over $A38 billion, specialising in corporate and real estate lending and asset financing. 

Net profit contribution of $A521 million, down 15% on 1H16 and broadly in line with 2H16. 

Highlights of the half year:

  • motor vehicle portfolio of $A17.8 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 period following the Esanda acquisition
  • aircraft leasing portfolio of $A8.5 billion
  • largest deregulated traditional and smart meter provider in the UK
  • lending portfolio of $A8.3 billion, with portfolio additions of $A0.8 billion for the half year. 

In August 2016, Macquarie Energy Leasing (MEL) partnered with Australia's Origin Energy to support its deployment of smart electricity meters in eastern and southern Australia. These meters enable households and businesses to see their electricity usage in real time and implement electricity demand management strategies.

MEL has been awarded contracts to fund the rollout of more than nine million smart meters in the UK, making it the largest independent owner of gas and electricity meters in the UK and Australia. The business also provides financing solutions on a range of energy efficient assets including solar PV, biomass boilers, LED lighting, battery storage and conventional distributed generation assets.

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 $A261 million, up 54% on 1H16 and up 45% on 2H16. 

Highlights of the half year:

  • 1.1 million Australian clients
  • 4% increase in total BFS deposits to $A42.2 billion
  • $A28.6 billion Australian mortgage portfolio, representing approximately 2% of the Australian mortgage market
  • $A62.1 billion of funds on platform
  • 8% increase in business banking loan portfolio since March 2016
  • unveiled new digital banking experience with market leading features in Australian banking
  • completed sale of Macquarie Life’s risk insurance business to Zurich Australia Limited
  • awarded iSelect’s 2016 Home Loans Partner of the Year and 2016 Innovation Award.

Read more about Banking and Financial Services

In September 2016, Macquarie unveiled its new digital banking experience with personalised and intuitive features that are firsts in Australian banking.

Using the same technologies as organisations like Netflix, the new experience empowers customers and partners with features including search-the-way-you-speak technology and the ability to tag and track transactions, upload receipts and warranties, set saving and spending goals and automatically categorise spending.

Macquarie Securities Group

Global institutional securities house with strong Asia-Pacific foundations covering sales, research, equity capital markets, execution and derivatives activities. 

Net profit contribution of $A18 million, down 93% on 1H16 and down 36% on 2H16. 

Highlights of the half year:

  • market volumes subdued across most regions as macroeconomic and geopolitical events weighed on investor sentiment towards equities
  • ranked No.1 overall (Global and Asia-Pacific) in the Chief Investment Officer 2016 Transition Management Survey
  • No.1 for IPO deals in Australia by value
  • ranked No.1 analyst in five sectors in South Africa
  • achieved No.1 market share in listed warrants in Singapore, No.2 in Malaysia, No.4 in Thailand and No.6 in Hong Kong.

Read more about Macquarie Securities Group

Macquarie’s economists, analysts and strategists collaborate to bring meaningful global insights and advice that help our institutional, corporate and retail clients to achieve their investment goals. Our proprietary research model centres on a simple framework that places importance on intellectual property and commerciality, producing reports that are valued for their focus on quality and actionable trade ideas. With approximately 200 analysts globally based in 18 countries, our team is the leading research house in Australia and top 10 globally by coverage with over 2,200 stocks covered.

Macquarie Capital

Global corporate finance capability, including mergers and acquisitions (M&A), debt and equity capital markets and principal investments. 

Net profit contribution of $A205 million, up 21% on 1H16 and down 27% on 2H16. 

Highlights of the half year:

  • advised on 201 transactions valued at $A65 billion
  • No.1 in M&A for both announced and completed deals in Australia & New Zealand
  • No.1 for IPOs in Australia by value
  • adviser to Brookfield Infrastructure, together with its institutional partners, on the acquisition of Asciano Limited for $A12 billion
  • adviser on behalf of Seoul Tunnel Co., Ltd. in connection with the $A948 million Seoul Jemulpo Tunnel Project
  • adviser to Siris Capital on its $US2 billion acquisition of Polycom and sole bookrunner and sole lead arranger on the $US975 million debt financing to support the acquisition
  • capital raising and acquisition, in conjunction with Commodities and Financial Markets, of a 50% principal investment in the 299MW Tees Renewable Energy Plant in the UK.

Read more about Macquarie Capital

Macquarie Capital acquired a 50MW portfolio of commercial battery storage projects in development in California from Advanced Microgrid Solutions (AMS). Macquarie Capital will facilitate up to $US200 million of project capital that will be used to design and construct multiple fleets of cutting edge energy storage projects across approximately 100 commercial, industrial and government facilities located in the West Los Angeles Basin. Macquarie Capital’s investment is one of the largest in the US battery storage sector and positions Macquarie as a market leader in this emerging growth area.

In addition to capital, Macquarie Capital will be providing ongoing advice and support to AMS through the final phases of project development, drawing on Macquarie’s extensive resources and infrastructure development experience in the renewable energy sector.

Commodities and Financial Markets

Provides clients with risk and capital solutions across physical and financial markets. 

Net profit contribution of $A472 million, up 67% on 1H16 and up 61% on 2H16. 

Highlights of the half year:

  • strong results across the energy platform, particularly from Global Oil and North American Gas
  • continued growth in the Asian metals and agriculture platforms
  • increased client flows in foreign exchange, interest rates and futures markets due to ongoing market volatility
  • increase in income generated from the sale of equity investments and a reduction in provisions for impairment in comparison to prior periods
  • maintained ranking by Platts as No.3 US physical gas marketer in North America.

Read more about Commodities and Financial Markets

In August 2016, Macquarie reached financial close on the £900 million Teesside biomass project, a 299MW biomass fuelled power station located in North-East England.

Macquarie worked as development partner alongside MGT Power, which had been developing the Tees Renewable Energy Plant since 2008. The project will be the world’s largest new-build biomass plant and will generate renewable electricity for the equivalent of 600,000 homes. Macquarie provided development funding from January 2015 to financial close.

The development of this project has been a collaboration between Commodities and Financial Markets (CFM) and Macquarie Capital. CFM’s expertise in power, fuel and financial markets trading were complemented by Macquarie Capital’s capital raising and equity underwriting investment capabilities in complex greenfield infrastructure projects.

Read more about this transaction

Interim Financial Report

The Interim Financial Report contains the Directors’ Report, including a review of operations and the financial result, and the full financial statements for Macquarie Group for the half year ended 30 September 2016. 

Additional information

Investor information

Key dates

Nov 08 Ex-dividend date for 1H17 interim ordinary dividend
Nov 09 Record date for 1H17 interim ordinary dividend
Dec 14 Payment date for 1H17 ordinary interim dividend 

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