Macquarie strongly back in the black

Macquarie Group appears to have left the global financial crisis behind and marched firmly back into the black, reporting a 21 per cent increase in full-year net profit to $1.05 billion.

The company announced to the Australian Securities Exchange today that it achieved the profit on the back of a 20 per cent lift in operating income to $6.6 billion.

Commenting on the result, Macquarie Group chief executive Nicholas Moore said it reflected improved market conditions and the diversification and global reach of the businesses, with international income accounting for 52 per cent of total income.

He noted that the result had contained fewer write-downs, impairments, equity account gains and losses, one-off items and higher employment expenses — while also being impacted by the cost of excess liquidity on the balance sheets.

Drilling down on the result, Macquarie’s Banking and Financial Services group contributed $261 million to total profit, turning around a lost of $99 million the previous year.

The company said that platform and other fee and commission income had risen by 10 per cent, with funds under administration on the Australian Wrap platform standing at $22.5 billion.

It said Macquarie Funds Group contribution $95 million with the acquisition of Delaware Investments in January, resulting in increased assets under management (AUM) to $151 billion.

It said base fees were up 65 per cent on the prior year driven by the increase in AUM.

Despite the solid result, Moore remained cautious about the outlook, saying that while market conditions were continuing to improve, uncertainty remained and made forecasting difficult.

However, he said that subject to market conditions, the group expected improved operating results for all of the businesses.