Australia’s Macquarie well-capitalised despite lower profits

Net profit fell by 32% for the fiscal year ended 31 March.

Australia-headquartered Macquarie Group’s (MGL) financial and business metrics remain sound despite reporting lower profits for fiscal year 2024.

MGL has announced a net profit of A$3.52b for the fiscal year 2024 that ended on 31 March. Whilst this is 32% lower than the previous year, the group's financial and business metrics remain sound and consistent with our expectations, S&P said.

“MGL's global footprint and diverse businesses mean that a drop in earnings from some businesses or geographies is typically offset by growth in others,” the ratings agency said in a non-rating commentary.

Notably, for the fiscal year, about two-thirds of the group's income came from outside Australia.

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Its four main businesses—banking and financial services, asset management, advisory and principal investing, and commodities and capital markets—were said to have contributed well to MGL’s earnings, S&P noted.

The consolidated group's capital surplus of A$10.7n over the regulatory requirements as of 31 March, and provides it with headroom for its 70% dividend payout.

The capital surplus also gives enough headroom for MGL to continue its A$2b on-market share buyback announced in 2023, which is about one-third complete, S&P said.

“We forecast that Macquarie Bank will remain strongly capitalized and maintain our risk-adjusted capital ratio soundly above 10%,” S&P concluded.