Macquarie bank posted a 29% rise in full year net profit to $2.063 billion, a record result and a return to pre GFC performances.
The second half, with profit up 7% to $993 million on the same time the year before, wasn’t as good as the first six months as expected and was down about 7%.
But the full year result, which smashed the bank’s previous record of $1.8 billion in 2008, was in line with analysts forecasts of $2.04 billion.
Macquarie, once a local investment house and now a truly global business, has 68% of revenue from international operations — $6,734 million for the year ended March 2016.
The company kept expenses running well below revenue. Net operating income was up 9% to $10.13 billion while sexpenses were up 6% to $7.12 billion.
Loan impairments and provisions increased 23% to $574 million.
CEO Nicholas Moore says the group is currently expecting net profit for 2017 to be broadly in line with 2016.
“Macquarie remains well positioned to deliver superior performance in the medium-term due to its deep expertise in major markets, strength in diversity and ability to adapt our portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives, a strong and conservative balance sheet and a proven risk management framework and culture,” Moore says.
The company declared a dividend of $2.40 per share, 40% franked.
Most divisions contributed to the increase in revenue and a key driver was the impact of a weaker Australian dollar.
However, the declining dollar wasn’t a gift for all of Macquarie’s businesses. Profit at the commodities and financial markets unit was down 31% to $576 million, driven by a decline in trading activity in the fourth quarter, partly due to the impact of the depreciation of the Australian dollar.
Banking and financial services profit was up 23% to $350 million, on strong growth in Australian mortgages, business lending, deposits and the wrap platform.
The Australian mortgage portfolio increased 16% to $28.5 billion, representing about 2% of the Australian market.
The results in detail: