Macquarie’s shares climb even as full-year profits dip

We take a look at some of the highlights from Macquarie’s full-year (FY20) earnings results, released to the market 8 Friday.

Macquarie FY20 results at a glance

Investors responded bullishly to Macquarie Group's full-year (FY20) earnings release, bidding the financial services company 6.32%, or $6.29 higher, to $105.84 per share by 3:41 pm (AEDT) on Friday.

According to UBS these results were in line with consensus.

Overall, on a year-over-year basis and for the period ending 31 March, Macquarie recorded:

  • Full-year net profits (NPAT) of $2,731 million, down 8%
  • Earnings per share (EPS) of $7.91, down 10%
  • Credit and impairment charges of $1,040 million, up 88%, from $552 million in FY19
  • Assets under management of $606.9 billion, up 10%
  • A final dividend of $1.80 per share, down 50% from FY19's final dividend

Like many other blue-chip Australian financial firms, Macquarie saw the coronavirus impact the company’s bottom-line towards the back half of FY20. As noted above, the firm's full-year net profits (NPAT) came in at $2,731 million – representing a decline of 8% – on a year-over-year basis.

The picture however deteriorates further the closer one looks towards the back-half of MQG's full-year results: In the second-half of FY20, for example, Macquarie's net profits (NPAT) fell 24%, to $1,274 million, when compared to 2H19 net profits.

Uncertainty persists

Reflecting on these results, which the market received positively, Macquarie’s Managing Director and Chief Executive Officer, Shemara Wikramanayake said:

'Macquarie's full-year result has also been subject to the effects of this crisis and a strong underlying financial performance in FY20 was impacted by a material increase in credit and other impairment charges, primarily reflecting the deterioration in current and expected macroeconomic conditions as a result of COVID-19.'

Looking forward and given the current economic uncertainty, Macquarie noted that it would not be providing FY21 guidance at this time.

'We continue to maintain a cautious stance, with a conservative approach to capita, funding and liquidity that positions us well to respond to the current environment,’ Ms Wikramanayake further stressed.

Dividends come in lower

Elsewhere, the current economic uncertainty, coupled with APRA’s recent directive that authorised deposit taking institutions (ADIs) – such as Macquarie – should limit discretionary capital distributions; resulted in MGQ trimming its final dividend.

As noted at the start, the firm’s final dividend came in 50% lower, at $1.80 per share: resulting in Macquarie recording a full-year dividend of $4.30 per share – representing a payout ratio of 56%.

Positively at least, the firm noted that, 'The final dividend will be funded entirely by 2H20 earnings of the Non-Bank Group.'

Firms such as ANZ and Westpac cut their interim dividends completely, while NAB slashed their interim dividend aggressively and at the same time raised $3.5 billion in fresh capital.

How to trade Macquarie – long or short

What do you make of this market announcement: do you see a bullish or bearish opportunity? Trade accordingly. You can use CFDs to trade Macquarie and Australia's big four banks – LONG or SHORT through IG’s world-class trading platform now.

For example, to buy (long) or sell (short) Macquarie using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘Macquarie’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.