How Macquarie (ASX:MQG) managed to double its first half profit

Macquarie Group Ltd (ASX:MQG) on Friday announced doubling of its profit in the first half of FY2022 to AU$2.04 billion. The investment bank also revealed its plans to raise AU$1.5 billion from institutional investors at AU$190 per share. Macquarie also offered a share purchase plan to retail investors of an unspecified size.

How Macquarie managed to double its first half profit

Highlights of 1HFY2022 financial results:

• First half net profit up 107% to AU$2.04 billion
• International income now represents 72% of total income
• Assets under management (AUM) up 31% during the six months to AU$737 billion
• CET1 level 2 ratio of 11.7%
• Capital surplus of AU$8.4 billion

What boosted the profit

The market-facing businesses under Macquarie Capital and most of its Commodities and Global Markets group reported a combined net profit contribution of AU$1.47 billion, up 118%.

The annuity style businesses under Macquarie Asset Management, Banking and Financial Services raised their net profit contribution 57% to AU$2.5 billion.

Source: © Robynmac    | Megapixl.com

Dividend payout cut

Macquarie cut its dividend payout ratio to 50% for an interim dividend of AU$2.72 per share. It is more than double the AU$1.35 per share in the corresponding period of last year.

What Macquarie’s management said

Commenting on the results, Macquarie’s Managing Director and Chief Executive Officer, Shemara Wikramanayake, said: “This first half saw a significant increase in net profit contribution from all four operating groups compared with 1H21, a period which was affected by the COVID-19 pandemic.”

Outlook

Macquarie provided no guidance for the remainder of FY2022 even as it was cautiously optimistic on the future.  “Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions,” said Wikramanayake.

Meanwhile, shares of Macquarie Group closed at AU$197.83 on Thursday.

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