Macquarie Group banks 50% increase in profit

Australian bank, Macquarie has announced a strong uptick in earnings for the year. The company banked an impressive $4.706 Billion in profit which was an increase of 56% on 3,015 Billion for the FY21. Net profit was also up by 30% on 1H22. The company decided to give back ordinary dividends to the value of $6.22 per share.

The bank unlike the other ‘Big 4’ has much more of a focus and a larger business dedicated to capital markets. It is more of an Investment Bank then a traditional lending bank. This allowed the organisation to remain versatile and adjust to the economic conditions. Assets under management grew 37% from $563 Billion to 774.8 Billion. The annuity side of the asset management team contributed a combined net profit of $4.132 Billion.

Withstanding volatile conditions, a significant portion of the year’s success came from its European investment and positions in both Rail and UK meters portfolio. Macquarie also had strong returns from its commodities and global sector rising by 50% for a total of $3.911 Billion which was supported by strong oil and gas prices.

Company CEO Shemara Wikramanyake outlined that “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.” The cautious review and outlook suggest that the volatility may remain for a while. Pressures from high-interest rates, inflationary pressures, and geopolitical events may still play a role in the short-term future.

The Macquarie Group price chart has been one of the more bullish charts within the Banking sector. Looking at the chart below, Macquarie Group has outperformed the Australian Banks ETF. However, the stock has seen a sell-off through the 200MA after a gap down on the release of the news this morning. This sell-off may be more reflective of the market than the companies’ performance itself with a very bearish overall market sentiment.