Macquarie misses expectations as green impairments rise
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More news: Macquarie shares are down 7.35% around 12:30pm after the financial group missed consensus expectations by about 11%.
Barrenjoey analysts said the miss was largely "driven by higher impairments of green investments”.
They noted strong performance out of the banking and financial services (BFS) division, although noted its volume growth had come at the same time its net interest margins were under pressure.
Performance in the commodities and global markets (CGM) business was slightly offset by rising expenses, while Macquarie Capital surged on the strength of higher fees and growth in private credit.
Jarden said Macquarie now “requires a big effort in [the second half] to hit consensus of $4.2 billion” guidance, which Macquarie appears to have largely maintained.
It suggested that early investment in data centres would continue to bear fruit for Macquarie in FY27 and FY28 and that it expected Macquarie to continue finding areas of growth.
"BFS continues to beat up the major banks with a superior contemporary retail and niche business proposition. However, lingering challenges remain in renewables, subdued CGM volumes, and regulation and compliance," it said.
What they said: Addressing analysts on Friday, Macquarie acknowledged $150 million in impairments had been made, largely related to green investments.
“We have actually made impairments in this first half. And we can give more details, but it's principally been in offshore wind in the Americas, is where we've seen challenges in the sector elsewhere. You know, we're at $2 trillion of investments now this last year in green assets so there is growth,” Macquarie Group chief executive Shemara Wikramanayake said.
Macquarie shares drop despite first-half profit growth
More news: Macquarie Group shares tumbled in early trade after its first-half profit of $1.7 billion missed expectations.
Shares were down 4.9% to $206.52 at 10:50am AEDT, taking 12-month losses to 10%.
Macquarie Group posts 3% rise in first-half profit, lifts interim dividend
The news: Macquarie Group has reported first-half net profit of $1.655 billion, up 3% on the prior corresponding period, but down 21% on the second half of FY25.
The numbers: Assets under management (AUM) totalled $959.1 billion at 30 September, up 2% over six months and up 5% compared to the same time a year ago.
The group posted a capital surplus of $7.6 billion. Its annualised return on equity was 9.6% compared with 11.2% in FY25.
Macquarie declared an interim ordinary dividend of $2.80 per share, up on last year's interim payout of $2.60 per share.
The context: Managing director and CEO Shemara Wikramanayake said the group saw an "improved underlying performance" in the first half. The company said AUM growth in the period was driven by favourable market movements and increased net asset valuations, offset by outflows in equity strategies and unfavourable foreign exchange movements.
Macquarie Asset Management delivered a net profit contribution of $1.175 billion, up 43% year on year, driven by higher performance fees. The group's banking and financial services unit provided a net profit contribution of $793 million, up 22% year on year, boosted by growth in its home loan portfolio and deposits, as well as a lower average headcount.
Macquarie's commodities and global markets (CGM) business saw its net profit contribution slide 15% year on year to $1.113 billion. The fall was attributed to higher operating expenses due to increased investment in the CGM platform, remediation-related spend and "significant" transaction-related costs.
Macquarie Capital's net contribution surged 92% year on year to $711 million, following higher M&A activity, as well as improved brokerage fee income and higher net income on its private credit portfolio.
The board has approved Macqurie to buy back as much as $2 billion of shares over the next 12 months, citing its strong capital position. The financial group said it would continue to “comfortably exceed” its regulatory requirements with a capital equity tier 1 ratio of 12.4%.
The source: ASX
