Macquarie chief's pay cut to $24m as 'millionaires' factory' rakes in $3.7b
Macquarie’s results showed a 33 per cent rise in profit contribution in its flagship asset management business, as well as an 11 per cent rise in profits from the banking division.
Macquarie’s retail bank, which has been a fierce rival against the big four, expanded its mortgage portfolio by 19 per cent to $141.7 billion, and Wikramanayake said it planned to continue its strong growth in home loans.
Its share of mortgages is about 5.9 per cent, and Wikramanayake said it was still “tiny” in this market.
“CBA represents the economy – Macquarie represents a segment,” says Jarden analyst Matt Wilson.Credit: Paul Jeffers and Grant Turne
“The majors are all in the double digits in their percentages of market share, so we hope we can just keep going,” Wikramanayake said.
The bank has also made an aggressive play for household deposits after investing in its digital banking platform. The banking division’s deposits jumped by 21 per cent to $172.4 billion.
Jarden analyst Matt Wilson said he thought Macquarie could continue to expand in retail banking for years to come by targeting professional customers who tend to be lower risk, such as doctors or accountants.
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“CBA represents the economy – Macquarie represents a segment,” Wilson said.
While Macquarie does not disclose the profit margins it is making in retail banking, Wilson said Macquarie’s branchless, fully digitised model gave it a cost advantage over the big four.
Profits were weaker in commodities and global markets division due to less hedging by clients and more subdued conditions in key energy markets. Profit contribution from Macquarie’s investment banking unit, Macquarie Capital, was broadly flat.
Wikramanayake noted the volatile market environment, but said Macquarie’s various business units had remained resilient.
“Against a backdrop of ongoing market and economic uncertainty, Macquarie’s client franchises remained resilient over the past year, delivering new business origination and underlying income growth, contributing to our history of unbroken profitability,” she said.
Macquarie’s shares were 4.4 per cent higher at $204.45 in afternoon trade. Macquarie will pay out a total of $6.50 in dividends for the financial year, up from $6.40 last year.
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