Macquarie deploys $5.7b into private credit in Q3 as profits grow
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The news: Macquarie Group deployed $5.7 billion into private capital in the third quarter as it flagged a "substantially" stronger net profit in its closely-watched commodities business.
The numbers: Posting an operational update on Tuesday, Macquarie Asset Management (MAM) grew 3% to $736.1 billion in assets under management, attributing the unit's "substantially" higher net profit contribution to the sale of its North American and European public investments business. Public investments grew 5% to $314.2 billion and private investments rose 1% to $421.9 billion, offset by a stronger Australian dollar and fund divestments.
Its banking and financial services (BFS) unit continued to take market share from the major retail banks in Australia, growing deposits 6% in the December quarter to $204.5 billion. Loans grew 7% to $172.2 billion.
Macquarie's commodities and global markets (CGM) business also appears to be strengthening into the second half of its financial year with the group noting third quarter net profit was up "substantially" on its last Q3. After a soft last result, it puts the unit roughly even year-to-date with FY25. It was driven by an "improved contribution" across commodities and asset finance, while the financial markets contribution was "broadly in line," over Q3. The group did not offer any further detail.
Macquarie Capital meanwhile recorded higher investment-related income on the back of higher asset realisations and higher net income from the now $28.9 billion private credit portfolio. Fee and commission income was down on the prior corresponding period due to the completion of several large deals.
What they said: “Macquarie remains well-positioned to deliver superior performance in the medium term with established, diverse income streams; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing investment in our operating platform; a strong and conservative balance sheet; and a proven risk management framework and culture," chief executive and managing director Shemara Wikramanayake said.
The context: It is Macquarie's first update since it released its first half results in November when it missed consensus estimates on the back of green-related impairments.
The update comes as Macquarie works on a string of regulatory issues, with APRA last week reducing its liquidity add-on.
The source: ASX
