Macquarie Group has delivered strong return on equity of 16.8% for the financial year ended 30 June 2018, which is 15.2% more than previous year returns. This comes after, profit attributable to shareholders grew $2,557 million from $2,217 million in FY17. The increase in profit is underpinned by a strong risk management framework and capital position. Group’s earnings have grown by 25% over the past 5 years delivering consistent dividend growth of 21% over five years CAGR.
International income contributes 67% of total income $10,920 million under which Australia region has made the highest contribution of $3,517 million. APRA Basel III Group capital at Jun 18 of $A18.8 billion, Group capital surplus of $A3.4 billion.
In short-term outlook update Group’s results for fiscal 2019 is expected to be broadly in line with FY18 which includes strong performance fees in MAM in first half of FY2019. However, the impact of foreign exchange, sale of Quadrant Energy, market conditions and other potential factors may substantially cast considerable changes in the actual results.
MQG continues to build on portfolio mix to have advantages over diversity in business. Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services provides annuity-style income, delivering superior returns following years of investment and acquisitions. Commodities and Global Markets and Macquarie Capital are well positioned to benefit from improvements in market conditions in medium-term. The company has already reported that strong trading conditions have been experienced in the first quarter of fiscal year 2019 followed by strong activity in CGM.
With a proven risk management framework and culture, the group has been experiencing the ongoing benefits of continued cost initiatives. Further, it has been proposed that minimum requirement for leverage ratio would be increased to 4% by APRA.
Following the outlook update announcement, Macquarie Group’s share price has increased by 1.011% to $123.880 on 11 September 2018 (12:36 PM AEST).
The Income available from dividends remains attractive for many investors.
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