Financial Services Company, Macquarie Group Limited (ASX: MQG) is having its operations in Annuity-style businesses which include Macquarie Asset Management (MAM), Corporate and Asset Finance (CAF) and Banking and Financial Services (BFS). The Group is also having its operation in Markets-facing businesses which include Commodities and Global Markets (CGM) and Macquarie Capital (MacCap). Today (12 February 2019) the Group has provided an update on business activity on the 2018 December Quarter (Q3 FY 2019) in which the company has reported that the trading conditions during the quarter were satisfactory across the group. Following the update, the share price of the company has increased by 2.984% as on 12 February 2019 (AEST 2:02 PM).
The company’s annuity-style businesses’ (MAM, CAF and BFS) combined December 2018 quarter net profit contribution was slightly up as compared to the previous corresponding period (pcp). However, for the nine months ended December 2018, net profit contribution was down on pcp due to lower performance fees in MAM business and offset by the timing of transactions in CAF Principal Finance.
The company’s markets-facing businesses’ (CGM and Macquarie Capital) combined net profit contribution in the December quarter was significantly up as compared to pcp. Moreover, the net profit contribution for the nine months ended December 2018 was also significantly up on pcp. The rise in the net profit contribution was mainly due to higher principal revenue in Macquarie Capital and the strong performance from the commodities platform in CGM.
At the end of the December quarter, the company had a Group capital surplus of $A4.0 billion which is $A3.4 billion higher than the September Quarter surplus, due to this, the company’s financial position is easily exceeding APRA’s Basel III regulatory requirement.
Further, at the end of December quarter, the Bank Group’s APRA Basel III Common Equity Tier 1 capital ratio was 10.8% which is 10.4% higher than the previous quarter. As at 31 December 2018, the Bank Group’s APRA leverage ratio was 4.9% (Harmonised: 5.6%), average LCR (Liquidity Coverage Ratio) was 163%, and NSFR (Net Stable Funding Ratio) was 111%.
As of 31 December 2018, the Macquarie Asset Management had assets under management of $A532.1 Bn. During the December quarter, Macquarie Infrastructure and Real Assets (MIRA) raised $A8.7 billion in new equity which include $A7.4 billion in Europe, invested equity of $A1.0 billion and divested $A1.2 billion of assets. At the end of December quarter, Corporate and Asset Finance’s Asset Finance and Principal Finance portfolio was at $A21.6 billion which is broadly in line with September quarter numbers.
While providing the outlook, the company informed that it is expecting an increase of up to 15% in the FY19 result compared with the FY18 result. In the past six months, the share price of the company decreased by 0.41% as on 11 February 2019. MQG’s shares traded at $125.620 with a market capitalization of circa $41.52 billion as on 12 February 2019 (AEST 2:02 PM).
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