Macquarie Group posted almost $1.7 billion in first-half profits as it raked in higher fees from funds management and investment banking, while its domestic banking unit continued its rapid expansion into the big four’s retail banking heartland.
The investment giant on Friday said the result for the six months to September was a 3 per cent increase on the same half last year, though 21 per cent lower than the March half. The result is lower than the consensus estimates of more than $1.8 billion cited by UBS before the result.
Macquarie chief executive Shemara Wikramanayake.Credit: Bloomberg
It comes after Macquarie shares have underperformed the ASX this year after underwhelming earnings earlier in the year and regulatory woes.
Macquarie’s bottom line benefited from higher fee income from funds management, increased revenue from mergers and acquisitions in its deal-making unit Macquarie Capital, and strong profit growth in Australian mortgages, where it has been disrupting the local market.
“The improved underlying performance across our operating groups in the first half reflects the ongoing benefits of our diverse business mix and our continued investment in opportunities that support long-term growth and deliver positive outcomes for our clients and communities,” chief executive Shemara Wikramanayake said.
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Three of its four divisions posted higher earnings: the asset management business, its banking and financial services unit, and the investment banking business Macquarie Capital all delivered growth. The exception was its commodities and global markets unit, where net profit contribution fell 15 per cent, mainly because of higher expenses.
In banking and financial services, Macquarie’s home loan portfolio swelled by 13 per cent, giving Macquarie a 6.5 per cent share of the domestic home loan market.
Macquarie has been a major challenger to the big four in recent years, pinching customers after it invested in a digital system that allows it to approve loans quickly for mortgage brokers. While the big four are all trying to write more loans through their own bankers, instead of mortgage brokers, Macquarie said more than 95 per cent of its mortgages were originated via the broker channel.
