Macquarie Group, Ltd. · ASX:MQG
Macquarie — Debt Investor Presentation (November 2024)
64 slides from Macquarie's debt investor presentation, November 2024
Slide 1: Macquarie Group Limited Presentation to Debt Investors
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Group Limited Presentation to Debt Investors November 2024 1 Sydney, Australia
Slide 2: Disclaimer
Overview Results Analysis Outlook Capital and Funding Appendices Disclaimer This presentation has been prepared on a strictly confidential basis by Macquarie Group Limited ABN 94 122 169 279 (“MGL or “Macquarie”) and contains general background information about MGL’s (and its subsidiaries including
Slide 3: Disclaimer
Overview Results Analysis Outlook Capital and Funding Appendices Disclaimer PROHIBITION OF SALES TO UK RETAIL INVESTORS – Nothing in this presentation is taken to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the
Slide 4: Agenda
Overview Results Analysis Outlook Capital and Funding Appendices Agenda 01 Overview 02 Results 03 Outlook Analysis 04 Capital and 05 Appendices Funding 4 1 Elizabeth Street – Macquarie Sydney Building
Slide 5: Overview
Overview Results Analysis Outlook Capital and Funding Appendices 01 Overview Presentation to Debt Investors November 2024 5 Macquarie Office, Hong Kong
Slide 6: Introduction to Macquarie
Overview Results Analysis Outlook Capital and Funding Appendices Introduction to Macquarie Macquarie is a global financial services group operating in 34 markets in asset management, retail and business banking, wealth management, leasing and asset financing, market access, commodity trading, renewa
Slide 7: About Macquarie
Overview Results Analysis Outlook Capital and Funding Appendices About Macquarie Annuity-style activities | Net Profit Contribution ~53% Markets-facing activities | Net Profit Contribution ~47% BFS MAM CGM MacCap Banking and Financial Services Macquarie Asset Management Commodities and Global Market
Slide 8: Macquarie funding structure
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie funding structure ● MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements ● MBL provides funding to the Bank Group1 ● MGL pro
Slide 9: Diversification by region
Overview Results Analysis Outlook Capital and Funding Appendices Diversification by region International income 65% of total income1 Total staff2 20,053 of which 52% international. A further ~254,000 people employed across managed fund assets and investments3 Americas EMEA Asia Australia4 31% of tot
Slide 10: 55 years of unbroken profitability
Overview Results Analysis Outlook Capital and Funding Appendices 55 years of unbroken profitability 2.0 $Am Hill Samuel UK opens branch 1.6 office in Sydney 1.2 Currency Recession Crisis 0.8 0.4 - 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Hills Motorway Global real estate Mortgage secur
Slide 11: Macquarie's approach to risk management
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie’s approach to risk management Strong focus on business accountability and risk ownership Stable and robust core risk management principles Our approach is consistent with the ‘three lines of defence’ model with clear accounta
Slide 12: Stable earnings relative to peers
Overview Results Analysis Outlook Capital and Funding Appendices Stable earnings 5 year earnings volatility relative to Macquarie Earnings volatility relative to Macquarie From the Global Financial Crisis (2008) to present – 16 years 6.0 4.0 5.0 3.0 x Multiple to Macquarie 4.1 x Multiple to Macquari
Slide 13: Macquarie Asset Management
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Asset Awards & Private Markets Management rankings Actively manages funds for investors $A373.6b $A7.2b $A31.8b Assets under management1 Equity raised Equity to deploy across multiple asset classes Broadly in line with March
Slide 14: Assets under management of $A916.8b
Overview Results Analysis Outlook Capital and Funding Appendices Assets under management of $A916.8b AUM decreased 2% from $A938.3b1 as at 31 Mar 24 Decrease due to unfavourable foreign exchange movements, outflows in equity strategies and divestments, partially offset by favourable market movements
Slide 15: Banking and Financial Services
Overview Results Analysis Outlook Capital and Funding Appendices Banking and Awards Financial Services Personal Banking Wealth management Macquarie’s retail banking and $A129.9b Mar9%24 $A152.4b Mar7 %24 financial services business Home loan portfolio1 Funds on platform Home loan growth driven by Ne
Slide 16: Home loan portfolio composition
Overview Results Analysis Outlook Capital and Funding Appendices Home loan portfolio composition NT 0.2% 100% 0% 1% 3% 0% QLD 4% 3% 3% 20.8% 90% WA 22% 21% 8.2% 80% 30% 70% 21% 20% NSW 60% 23% 37.0% 50% 23% 40% 22% 30% ACT 2.4% 20% 41% 31% 33% 10% SA 3.5% 0% 2 VIC Sep-24 (Settlement Flow) Sep-24 (Po
Slide 17: Banking and Financial Services
Overview Results Analysis Outlook Capital and Funding Appendices Banking and Financial Services Growth in Home loans, BFS deposits, Funds on platform and Business Banking loans $Ab $Ab Home loans1 BFS deposits2 31 Mar 22 31 Mar 23 31 Mar 24 30 Sep 24 Note: Data based on spot volumes at period end. A
Slide 18: Commodities and Global Markets
Overview Results Analysis Outlook Capital and Funding Appendices Commodities and Awards & Commodity Financial Markets Global Markets rankings Markets (54%5) (38%5) CGM is a global business offering capital and financing, risk ~7.9 billion management, market access, physical execution and cubic feet
Slide 19: Strong underlying client business
Overview Results Analysis Outlook Capital and Funding Appendices Strong underlying client business Consistent levels of income derived from underlying client business Operating Income Client numbers (excl. credit and other impairment charges) (excl. Asset Finance) Regulatory capital2 Underlying clie
Slide 20: Macquarie Capital
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Capital Awards & Summary Notable Deals rankings Global capability in advisory and Advising and investing in areas of Exclusive sell-side adviser to Azure ● No. 1 in ANZ for deep expertise in sectors such as Summit Technology
Slide 21: Macquarie Capital
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Capital Movement in capital Private Credit sector exposures2 $Ab 1.3 6.0 (0.5) (0.2) 5.4 Other (incl. FX)1 1. Other (incl. FX) includes accounting movements. 2. Exposures shown follow the economic capital adequacy methodology
Slide 22: MGL HY25 Results Review
Overview Results Analysis Outlook Capital and Funding Appendices 02 MGL HY25 Results Review Presentation to Debt Investors November 2024 22 Sydney, Australia
Slide 23: 1H25 net profit contribution from Operating Groups up 6% on 1H24
Overview Results Analysis Outlook Capital and Funding Appendices 1H25 net profit contribution from Operating Groups $A3,021m up 6% on 1H24 Annuity-style activities Markets-facing activities 25% 10% $A1,614m ON 1H24 $A1,407m ON 1H24 Non-Banking Group Macquarie Asset Management (MAM) Macquarie Cap
Slide 24: 1H25 net profit contribution from Operating Groups down 22% on 2H24
Overview Results Analysis Outlook Capital and Funding Appendices 1H25 net profit contribution from Operating Groups $A3,021m down 22% on 2H24 Annuity-style activities Markets-facing activities 6% 34% $A1,614m ON 2H24 $A1,407m ON 2H24 Non-Banking Group Macquarie Asset Management (MAM) Macquarie Cap
Slide 25: 1H25 result: $A1,612m up 14% on 1H24
Overview Results Analysis Outlook Capital and Funding Appendices 1H25 result: $A1,612m up 14% on 1H24; down 23% on 2H24 1H25 2H24 1H24 1H25 v 1H25 v $Am $Am $Am 1H24 2H24 Net operating income 8,216 8,977 7,910 4% 8% Total operating expenses (5,919) (6,142) (5,919) - — 4% Operating profit befor
Slide 26: Outlook
Overview Results Analysis Outlook Capital and Funding Appendices 03 Outlook Presentation to Debt Investors November 2024 26 Dallas, USA
Slide 27: Short-term outlook
Overview Results Analysis Outlook Capital and Funding Appendices Short-term outlook Factors impacting short-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) ● Base fees expected to be broadly in line Subject
Slide 28: Short-term outlook
Overview Results Analysis Outlook Capital and Funding Appendices Short-term outlook The range of factors that may influence our short-term outlook include: ● Market conditions including: global economic conditions, inflation and interest rates, significant volatility events, and the impact of geopol
Slide 29: Medium-term outlook
Overview Results Analysis Outlook Capital and Funding Appendices Medium-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) ● Well-positioned to respond to current market conditions and grow assets under manage
Slide 30: Medium-term outlook
Overview Results Analysis Outlook Capital and Funding Appendices Medium-term outlook Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses Deep expertise across diverse sectors in major ma
Slide 31: Capital and Funding
Overview Results Analysis Outlook Capital and Funding Appendices 04 Capital and Funding Presentation to Debt Investors November 2024 31 Macquarie Office, Melbourne
Slide 32: Strong regulatory ratios
Overview Results Analysis Outlook Capital and Funding Appendices Strong regulatory ratios Bank Group Level 2 Ratios (Sep 24) 2 110% 110% 1,2 2 Bank Group (Harmonised3) Bank Group (APRA) APRA Basel lll minimum4 1. Average LCR for Sep 24 quarter is based on an average of daily observations. 2. APRA im
Slide 33: Basel III Group capital position
Overview Results Analysis Outlook Capital and Funding Appendices Basel III Group capital position ● Strong capital position to support business activity and invest in new opportunities where expected risk adjusted returns are attractive ● APRA Basel III Group capital surplus of $A9.8b1,2 ● APRA Base
Slide 34: Capital management update
Overview Results Analysis Outlook Capital and Funding Appendices Capital management update On-market share buyback • On 3 Nov 23, Macquarie announced that it intends to buy back up to $A2b of ordinary shares on-market • As at 31 Oct 24, a total of $A1,013m of ordinary shares were acquired on market
Slide 35: Business capital requirements
Overview Results Analysis Outlook Capital and Funding Appendices Business capital requirements1 1H25 Key drivers 1H25 business capital requirement growth of $A1.2b excluding MAM FX movements ● Net movements in fund co- investments, underwrites and divestments BFS ● Growth in home loans and business
Slide 36: Tier 2 Capital Profile
Overview Results Analysis Outlook Capital and Funding Appendices Tier 2 Capital Profile Eligible Tier 2 Capital1,2 MBL Tier 2 Composition by currency Composition by format • As at Sep-24, MBL has $A9.0b of eligible Tier 2 capital on issue1,2 • APRA announced Australian major banks will be subject to
Slide 37: Balance sheet highlights
Overview Results Analysis Outlook Capital and Funding Appendices Balance sheet highlights ● Balance sheet remains solid and conservative: − Term assets covered by term funding, stable deposits, hybrids and equity − Short-term wholesale funding covered by cash, liquids and other short-term assets ● T
Slide 38: Funded balance sheet remains strong
Overview Results Analysis Outlook Capital and Funding Appendices Funded balance sheet remains strong Term liabilities exceed term assets 31 Mar 24 30 Sep 24 $Ab $Ab Commercial paper and Commercial paper and certificates certificates of deposit 12% of deposit 9% Other debt maturing in the next Cash a
Slide 39: Diversified issuance strategy
Overview Results Analysis Outlook Capital and Funding Appendices Diversified issuance strategy Term funding as at 30 Sep 24 - diversified by currency, tenor and type Currency1 Tenor2 Type 4.6 years WAM3 of Term funding4 Term Issuance and Maturity Profile 1. Equity has been allocated to the AUD curre
Slide 40: Diversified deposit base
Overview Results Analysis Outlook Capital and Funding Appendices Diversified deposit base Macquarie has seen continued success in its long-term strategy of diversifying funding sources by growing its customer deposit base Of approximately 1.9 million BFS clients, ~1.5 million are depositors Composit
Slide 41: Appendix A: Further Financial Information and Governance
Overview Results Analysis Outlook Capital and Funding Appendices 05 Appendix A: Further Financial Information and Governance Presentation to Debt Investors November 2024 41 Macquarie Office, Melbourne
Slide 42: Macquarie Asset Management
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Asset Management Key drivers ● Higher Private Markets base fees due to Increase primarily driven by higher performance fees and fundraising and investments made by funds and mandates, partially offset by asset investment-rela
Slide 43: MAM AUM movement
Overview Results Analysis Outlook Capital and Funding Appendices MAM AUM movement Decrease due to unfavourable foreign exchange movements, outflows in equity strategies and divestments, partially offset by favourable market movements, increased fund investments and net asset valuations 1. Divestment
Slide 44: Banking and Financial Services
Overview Results Analysis Outlook Capital and Funding Appendices Banking and Financial Services Key drivers ● Lower Personal Banking income driven by Growth in the loan portfolio and BFS deposits, together with lower margin compression, partially offset by 12% growth in average home loan volumes4 ex
Slide 45: Commodities and Global Markets
Overview Results Analysis Outlook Capital and Funding Appendices Commodities and Global Markets Key drivers ● Commodities down on 1H24 Strong underlying client business, well-positioned for upside − Risk management income decreased on 1H24 primarily in Global Gas, Power and Emissions opportunities a
Slide 46: Macquarie Capital
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Capital Key drivers ● Lower net income on the private credit portfolio Reflects lower investment-related income, partially offset by primarily due to: − Higher origination credit provisions due to higher fee and commission in
Slide 47: Cost of regulatory compliance and technology spend
Overview Results Analysis Outlook Capital and Funding Appendices Cost of regulatory compliance and technology spend We continue to invest in regulatory compliance and technology. Total spend during 1H25 reflects progress on a number of initiatives to support regulatory changes Regulatory compliance
Slide 48: Approximate business Basel III Capital and ROE
Overview Results Analysis Outlook Capital and Funding Appendices Approximate business Basel III Capital and ROE 30 Sep 24 APRA Basel III Capital 1H25 Return on Ordinary 18-year Average Return on Operating Group @ 10.5% ($Ab) Equity1 Ordinary Equity2 Annuity-style businesses 11.6 Macquarie Asset Mana
Slide 49: Regulatory update
Overview Results Analysis Outlook Capital and Funding Appendices Regulatory update Australia (Prudential) APRA has finalised or is in the process of implementing changes to a number of prudential standards. Macquarie notes the following key updates: ● On 10 Sep 24, APRA released a discussion paper r
Slide 50: Loan and lease portfolios – funded balance sheet
Overview Results Analysis Outlook Capital and Funding Appendices Loan and lease portfolios1 – funded balance sheet Operating Sep 24 Mar 24 Group Category $Ab $Ab Description Home loans 131.0 120.4 Loans secured by mortgages over residential property Business banking 16.4 15.7 Loan portfolio secured
Slide 51: Equity investments of $A12.3b
Overview Results Analysis Outlook Capital and Funding Appendices Equity investments of $A12.3b1 Carrying value Carrying value Category Description Sep 24 $Ab Mar 24 $Ab Includes investments in regional infrastructure and core Macquarie Asset Management Private 2.2 2.0 infrastructure, real estate, co
Slide 52: Appendix B: Funding and Liquidity
Overview Results Analysis Outlook Capital and Funding Appendices 05 Appendix B: Funding and Liquidity Presentation to Debt Investors November 2024 52 UK, London
Slide 53: Funded balance sheet reconciliation
Overview Results Analysis Outlook Capital and Funding Appendices Funded balance sheet reconciliation ● The funded balance sheet is a simple representation of Macquarie’s funding requirements once accounting related gross-ups and self-funded assets have been netted down from the statement of financia
Slide 54: Funding for Macquarie
Overview Results Analysis Outlook Capital and Funding Appendices Funding for Macquarie Sep 24 Mar 24 Sep 23 ● Well diversified funding sources $Ab $Ab $Ab ● Term assets covered by term funding, stable deposits, hybrids Funding sources and equity Commercial paper and certificates of deposit 40.2 29.7
Slide 55: Funding for the Bank Group
Overview Results Analysis Outlook Capital and Funding Appendices Funding for the Bank Group Sep 24 Mar 24 Sep 23 ● Bank balance sheet remains liquid and well capitalised, with a $Ab $Ab $Ab diverse range of funding sources Funding sources Commercial paper and certificates of deposit 40.2 29.7 37.4 ●
Slide 56: Funding for the Non-Bank Group
Overview Results Analysis Outlook Capital and Funding Appendices Funding for the Non-Bank Group Sep 24 Mar 24 Sep 23 ● Non-Bank Group is predominantly term funded $Ab $Ab $Ab Funding sources ● Term funding beyond one year (excluding equity and Net trade (debtors)/creditors (1.3) (0.9) (1.0) securiti
Slide 57: Explanation of funded balance sheet reconciling items
Overview Results Analysis Outlook Capital and Funding Appendices Explanation of funded balance sheet reconciling items Derivative revaluation Segregated funds Outstanding trade Working capital assets settlement balances Offsetting derivative positions do not These represent the assets and liabilitie
Slide 58: Strong liquidity position maintained
Overview Results Analysis Outlook Capital and Funding Appendices Strong liquidity position maintained ● 194% average LCR for Sep 24 quarter, based on daily observations1,2 − Well above regulatory minimum ● Reflects longstanding conservative approach to liquidity management ● $A56.1b of unencumbered
Slide 59: Conservative long standing liquidity risk management framework
Overview Results Analysis Outlook Capital and Funding Appendices Conservative long standing liquidity risk management framework Liquidity Policy Liquidity Framework The liquidity risk appetite is intended to ensure that Macquarie is able A robust liquidity risk management framework is designed to en
Slide 60: Appendix C: ESG & Net Zero
Overview Results Analysis Outlook Capital and Funding Appendices 05 Appendix C: ESG & Net Zero Presentation to Debt Investors November 2024 60
Slide 61: Environmental, Social and Governance
Overview Results Analysis Outlook Capital and Funding Appendices Environmental, Macquarie recognises the importance of sound ESG practices as part of our responsibility to shareholders, funders, clients, Social and employees and the communities in which Macquarie operates Governance Climate change S
Slide 62: Macquarie's climate commitments and capabilities
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie’s climate commitments and capabilities Macquarie has been driving practical Our approach to net zero and climate climate solutions for almost 20 years, with risk is set out in our Net Zero and our first investments in renewab
Slide 63: Macquarie's commitments include
Overview Results Analysis Outlook Capital and Funding Appendices Our climate commitments Align our financing activity Continue to reduce the with the global goal of net zero emissions of our own emissions by 2050 business operations Macquarie’s We have financed emissions targets in place for the fol
Slide 64: Macquarie Group Limited
Overview Results Analysis Outlook Capital and Funding Appendices Macquarie Group Limited Presentation to Debt Investors November 2024 Sydney, Australia
Macquarie Group — Debt Investor Presentation (November 2024) on 6ix