Macquarie Group posted a record full year net profit of $2.56 billion, the 49th year in a row of profitability.
The result is a 15% improvement on the previous record of $2.21 billion, a 7.46% rise, set last year, and is slightly ahead of analyst expectations.
Net operating income in 2018 was up 5% to $10.92 billion. Operating expenses were 3% higher at $7.45 billion. International accounted for 67% of total income.
CEO Nicholas Moore says the result highlights the strength of Macquarie’s global platform, the diversity of its business mix and ongoing ability to adapt to changing market conditions and client needs.
In early trade, Maccquarie shares were up 1.8% to $109.75.
The investment bank’s annuity-style businesses, representing 70% of the annual performance, made a combined net contribution of $3.45 billion, up 6%.
Moore says the group is well positioned, with a strong and diverse global platform and deep expertise across a range of products, markets and asset classes.
“This is built on the foundation of a strong balance sheet, surplus capital, a robust liquidity and funding position and a conservative approach to risk management which is embedded across all operating groups,” he says.
Macquarie’s global assets under management to March were up 3% to $496.7 billion.
The group increased fee and commission income by 8% to $4.67 billion, reflecting increased market share and client activity in the US.
This was partially offset by lower mergers and acquisitions and equity capital markets fee income in Macquarie Capital.
Net interest and trading income of $3.94 billion was in line with last.
Chief Financial Officer Alex Harvey said: “Macquarie remains well funded with a solid and conservative balance sheet and we continue to pursue our strategy of diversifying funding sources by continuing to grow the deposit base and accessing a variety of funding markets.”
The company declared a final dividend of $3.20 per share, 45% franked. The total dividend payment for the year of $5.25 a share,a payout ratio of 70%, is up from $4.70 last year.
Macquarie, unlike other major Australian banks, added employees. Staff numbers at the end of March were 14,469, up from 13,597 a year earlier.
The 2018 numbers at a glance:
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