A blockbuster result from Macquarie Group Ltd.’s commodities trading business helped offset a downturn in dealmaking to deliver the bank a 10% jump in annual profit.
(Bloomberg) — A blockbuster result from Macquarie Group Ltd.’s commodities trading business helped offset a downturn in dealmaking to deliver the bank a 10% jump in annual profit.
Net income rose to A$5.18 billion ($3.47 billion) in the year to March 31, according to a statement Friday. That topped the A$4.99 billion forecast from analysts surveyed by Bloomberg. The Australian investment bank will pay a final dividend of A$4.50 a share.
“Against a less certain market and economic backdrop, the diversity of Macquarie’s activities and the expertise of our teams ensured we maintained strong performance during the year,” Chief Executive Officer Shemara Wikramanayake said in the statement.
Ructions in commodities markets drove a 54% surge in profit from its commodities and global markets unit to A$6 billion as hedging and trading activity rose. That made the head of that business, Nick O’Kane, the highest-paid executive at the bank for the year. O’Kane is getting a 59% boost to A$57.6 million for the year through March 2023, according to the firm’s annual report released Friday. In contrast, Wikramanayake is getting a total of A$32.8 million, up 27% from a year earlier.
Read more: Macquarie’s Top Commodity Trader Makes $39 Million, Beating CEO
Macquarie shares dipped 1% as of 11:40 a.m. in Sydney, leaving this year’s advance at about 5.5%.
Profit from Macquarie’s investment banking advisory business almost halved, compared with a year ago, falling to A$801 million. Mergers and acquisitions activity is down more than 40% this year, according to data compiled by Bloomberg, as economic uncertainty and tighter lending markets give companies pause.
What Bloomberg Intelligence Says
“Strong assets under management and loan growth positions the annuity style businesses well for 2024, offsetting a likely slowdown in the commodities and global markets operations” — Matt Ingram, senior industry analyst at Bloomberg Intelligence
The Sydney-based bank’s return on equity slipped to 16.9%, from 18.7% a year ago.
(Updates compensation details in fourth paragraph, share price in fifth paragraph)
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