by Chris Becker
The fifth pillar in the Australian banking sector, Macquarie Group (MQG) announced its 2nd highest profit result ever (yes, the other one was before the GFC).
Here are the juicy details:
- net profit up 27% to $1.6 billion
- operating income up 14% to $9.3 billion
- operating expenses up 12% to $6.8 billion
- return on equity (ROE) at 14%, up from 11.1% (wow! thats a huge improvement)
- funds/assets under management (FUM) up 14% – which corresponds to the income/expense rise
Its all about FUM at the Factory of course and a key part of that is its mortgage business, up a staggering 44% on last year to $24.5 billion – still a drop in the ocean in the trillion dollar business that Megabank controls.
Some of this result can be explained by a decrease in the effective tax rate and a better FX result due to the lower Aussie dollar, but mainly its FIRE growth across the board in an era of super low rates.
MQG also contend they see no reason to change their capital profile with a maximum impact of $250 million, but having recently raised equity (approx. $700 million in March) sees no reason to join the huge NAB bandwagon.
The bank reckons the outlook is good on all fronts, especially its mortgages – and why not with Sydney going apeshit – and expect a similar profit jump for FY16.
The market loves it pushing the stock up 5% to over $80 per share, dragging up most of the other FIRE crowd who have suffered a decent correction of late.
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seems MQB is a bubble stock
2007′ ish MacBank was racing Rio to see who would get to $100 first. A relative few months later they were at $18 odd and facing extinction, when someone on here ( I can’t recall who) wrote “Stick them in your bottom draw and wait” Well done that poster, you had far more courage than me 🙁
If I not not been one of the many that got the “move along now sir” from them at that time I would have loaded up for sure, they were a buy at around $17 …
These needy battlers. These worthy recipients.
These are the beneficiaries of Glenn’s grossly underpriced mortgage debt experiment.
Fear’d by their breed and famous by their birth,
Their mortgage business is nothing in the scheme of things.
The donut is a giant positive carry shop. Borrowing at rock bottom and gearing into anything they can get carry on.
It is incredible how well they have transitioned since the GFC.
Businesses that didn’t exist now making billions and others that made billions barely making a $.
I tip my hat to them.
Exactly. Whatever your thoughts about these guys they have turned it well around.
surprise?
Bubbles always burst at the peak of banking profit cycle
Macquarie isn’t a bank any more. It’s a fund manager, that occasionally does m&a. That’s why it’s ROE is so much higher, but compare it to other fund managers and it looks lousy all over again.
Perfect photo.