Not even the most chipper of results were able to turn a trick amid this morning’s broad market selloff, with Macquarie Group (ASX: MQG) down -6.79% after the financial services giant posted FY22 profit after tax of $4.71bn to the end of March, up 56% on the previous period.
This reflects a 36% jump in net operating income to $17,324m and a 22% jump in operating expenses to $10,785m.
However, it should be noted that today’s second-half profit of $2,663m was a -4.9% miss against Goldman Sachs’ estimates.
A surge in energy market volatility and wave of global merger and acquisition activity helped Macquarie’s markets’ facing commodities and capital markets businesses generate a 92% increase in earnings to $5.33bn for the year to March 31.
International businesses comprised 75% of the total earnings, with the Americas contributing 48% and Australia around a quarter.
Record performances were achieve across three of the group's four divisions.
Overall, the Macquarie Capital business was the standout performer, with higher fee and commission income - due to M&A and debt capital markets activities – delivering a net profit contribution of $2,400m in FY 2022, up 269% from $651m in FY 2021.
Driven by increased revenue across commodities - with strong risk management revenue driven by increased client hedging activity and trading activity - the commodities and global Markets (CGM) business delivered a 50% increase in its net profit contribution to $3,911m.
Another strong performer on the back of strong growth in its loan portfolio, funds on platform and total BFS deposits was the Banking and Financial Services (BFS) business which delivered a net profit contribution of $1,001m, up 30% year on year (YoY).
Macquarie Asset Management (MAM) was the only division not to hit a record, yet it still delivered a net profit contribution of $2.15bn, up 4%.
The group paid a final 40% franked dividend of $3.50 per share, up 4.5% year on year, but well below what $4.40 Goldman Sachs was expecting.
Overall the group is paying shareholders a total of $6.22 per share on a 50% payout ratio, at the lower end of the bank’s 50% to 70% target range.
To satisfy requirements related to its employee-retained equity plan from May 16 to June end, the group will also buy back about $870m worth of shares.
Profit up 31% on the previous period to $2.66bn
Total operating income up 36% to $17,324m
FY 2022 net profit up 56% to $4,706m
International income is now 75% of total income
Assets under management of $774.8bn
The group did not provide any short-term guidance, but reiterated a conservative approach to capital, funding and liquidity.
Due to deep expertise in major markets, strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions, CEO Shemara Wikramanayake believes the group is well-positioned to deliver superior performance in the medium term.
“While many of the regions and markets in which Macquarie operates saw heightened levels of volatility this year, our longstanding strategy to address key areas of unmet need in the community is unchanged,” Wikramanayake said.
Macquarie Group: Share price performance over five years.
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