Presentation to investors and analysts
27 October 2017
Result announcement for the half-year ended 30 September 2017
2
The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (MGL) and is general background information aboutMacquarie’s (MGL and its subsidiaries) activities current as at the date of this presentation. This information is given in summary form and does not purport to becomplete. The material contained in this presentation may include information derived from publicly available sources that have not been independently verified.Information in this presentation should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing orselling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Beforeacting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular,you should seek independent financial advice. No representation or warranty is made as to the accuracy, completeness or reliability of the information. All securitiesand financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or politicaldevelopments and, in international transactions, currency risk.
This presentation may contain forward looking statements – that is, statements related to future, not past, events or other matters – including, without limitation,statements regarding our intent, belief or current expectations with respect to Macquarie’s businesses and operations, market conditions, results of operation andfinancial condition, capital adequacy, provisions for impairments and risk management practices. Readers are cautioned not to place undue reliance on theseforward looking statements. Macquarie does not undertake any obligation to publicly release the result of any revisions to these forward looking statements or tootherwise update any forward looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation. Actualresults may vary in a materially positive or negative manner. Forward looking statements and hypothetical examples are subject to uncertainty and contingenciesoutside Macquarie’s control. Past performance is not a reliable indication of future performance.
Unless otherwise specified all information is for the half-year ended 30 September 2017.
Certain financial information in this presentation is prepared on a different basis to the Financial Report within the Macquarie Interim Financial Report (“the FinancialReport”) for the half-year ended 30 September 2017, which is prepared in accordance with Australian Accounting Standards. Where financial information presentedwithin this presentation does not comply with Australian Accounting Standards, a reconciliation to the statutory information is provided.
This presentation provides further detail in relation to key elements of Macquarie’s financial performance and financial position. It also provides an analysis of thefunding profile of Macquarie because maintaining the structural integrity of Macquarie’s balance sheet requires active management of both asset and liabilityportfolios. Active management of the funded balance sheet enables the Group to strengthen its liquidity and funding position.
Any additional financial information in this presentation which is not included in the Financial Report was not subject to independent audit or review byPricewaterhouseCoopers.
Disclaimer
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Agenda
1. Introduction – Karen Khadi
2. Overview of Result – Nicholas Moore
3. Result Analysis and Financial Management – Patrick Upfold
4. Outlook – Nicholas Moore
5. Appendices
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Introduction01 Karen Khadi – Head of Investor Relations
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Overview of Result02 Nicholas Moore – Managing Director and Chief Executive Officer
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
6
Building for the long-term
1. As at 30 Sep 17. 2. CAF Principal Finance formerly known as CAF Lending. 3. Funds on platform includes Macquarie Wrap and Vision. 4. BFS deposits exclude corporate/wholesale deposits.
Corporate and Asset Finance (CAF)
• Global provider of specialist finance and asset management solutions, with a $A35.5b1 asset and loan portfolio
• Asset Finance has global expertise in aircraft, vehicles, technology, healthcare, manufacturing, industrial, energy, rail, and mining equipment
• Principal Finance2 provides flexible primary financing solutions and engages in secondary market investing, across the capital structure. It operates globally in both
corporate and real estate sectors
Banking and Financial Services (BFS)
• Macquarie’s retail banking and financial services business with a $A37.6b1 Australian loan portfolio, funds on platform3 of $A78.9b1 and BFS deposits4 of $A46.4b1
• Provides a diverse range of personal banking, wealth management and business banking products and services to retail clients, advisers, brokers and
business clients
Commodities and Global Markets (CGM)
• Integrated, end-to-end offering across global markets including equities, fixed income, foreign exchange and commodities
• Provides clients with risk and capital solutions across physical and financial markets
• Diverse platform covering more than 25 market segments, with more than 160 products
• Growing presence in commodities (natural gas, LNG, NGLs, power, oil, coal, base metals, iron ore, sugar and freight)
• Global institutional securities house with strong Asia-Pacific foundations covering sales, research, ECM, execution and derivatives and trading activities
Macquarie Capital (MacCap)
• Global capability in M&A Advisory, Debt and Equity Capital Markets and Principal Investments
• Focus on core areas of expertise: Infrastructure, Utilities and Renewables; Real Estate; Telecommunications, Media, Entertainment & Technology; Resources;
Industrials; and Financial Institutions
ABOUT MACQUARIE
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Capital
markets
facing
businesses
Macquarie Asset Management (MAM)
• Top 50 global asset manager with $A471.9b1 of assets under management
• Provides clients with access to a diverse range of capabilities and products, including infrastructure, real assets, equities, fixed income, liquid alternatives and multi-
asset investment management solutions
Annuity-
style
businesses
7
1H18
$Am
2H17
$Am
1H17
$Am1H18 v
1H17
1H18 v
2H17
Net operating income 5,397 5,146 5,218 3% 5%
Total operating expenses (3,693) (3,527) (3,733) 1% 5%
Operating profit before income tax 1,704 1,619 1,485 15% 5%
Income tax expense (448) (430) (438) 2% 4%
Effective tax rate1 (%) 26.4 26.9 29.4
(Profit)/loss attributable to non-controlling interests (8) (22) 3
Profit attributable to MGL shareholders 1,248 1,167 1,050 19% 7%
Annualised return on equity (%) 16.7 15.8 14.6 14% 6%
Basic earnings per share $A3.70 $A3.46 $A3.12 19% 7%
Ordinary dividends per share $A2.05 $A2.80 $A1.90 8% 27%
1H18 result: $A1,248m up 19% on 1H17; up 7% on 2H17
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
1. Calculation of the effective tax rate is after adjusting for the impact of non-controlling interests.
8
CGM14%
MacCap7%
BFS11%
CAF23%
MAM45%
Net profit
contribution
1H18 net profit contribution from operating groups$A2,662m up 14% on 1H17; up 12% on 2H17
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
CGM: on 1H17Reduced income from the sale of investments
and lower volatility across the commodities
platform resulting in reduced client activity and
trading opportunities
Macquarie Capital: on 1H17Increased client activity in DCM, offset by
subdued activity in M&A and ECM, and lower
investment-related income
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups.
MAM: on 1H17Continued strong performance, benefited from
increased performance fees; base fees and
investment-related income broadly in line
CAF: on 1H17Leasing book continued to perform well; higher
prepayments, realisations and investment-related
income in Principal Finance albeit reduced income
from lower portfolio volumes; reduced provisions and
impairments overall
ANNUITY-STYLE BUSINESSES
$A2,094m 28% ON 1H17
30% ON 2H17
BFS: on 1H17Volume growth in loan and deposit portfolios and
improved margins; 1H17 benefited from the gain on
sale of Macquarie Life’s risk insurance business
CAPITAL MARKETS FACING BUSINESSES
$A568m 18% ON 1H17
25% ON 2H17
9
Financial performance
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
1H18 OPERATING INCOME
Operating income $A5,397m
1H18 DPS
DPS $A2.05
1H18 PROFIT
Profit $A1,248m
1H18 EPS
EPS $A3.70
3%
ON 1H17
5%
ON 2H17
19%
ON 1H17
7%
ON 2H17
19%
ON 1H17
7%
ON 2H17
8%
ON 1H17
27%
ON 2H17
4,400
4,800
5,200
5,600
1H16 2H16 1H17 2H17 1H18
$Am
-
1.00
2.00
3.00
4.00
1H16 2H16 1H17 2H17 1H18
$A
-
1.00
2.00
3.00
1H16 2H16 1H17 2H17 1H18
$A
-
500
1,000
1,500
1H16 2H16 1H17 2H17 1H18
$Am
10
AUM decreased $A8.1b since 31 Mar 17, largely due to net asset realisations in MIRA2 and unfavourable
currency movements in MIM, partially offset by positive market movements
1. As at 30 Sep 17. 2. Includes divestment of Thames Water by MIRA-managed funds and ceasing asset services to consortia investors ($A25b).
Assets under management of $A473.6 billion1
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Ab
-
100
200
300
400
500
Mar 14 Mar 15 Mar 16 Mar 17 Sep 17
Fixed income Infrastructure Equities Other Real estate
11
Diversification by region
1. Net operating income excluding earnings on capital and other corporate items. 2. Includes New Zealand.
International income 62% of total income1
Total staff 13,966; International staff 55% of total
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Europe, Middle East and Africa
$A1,496m 1,694INCOME STAFF
28% OF TOTAL
EUROPEDublinEdinburghFrankfurtGenevaLondonLuxembourg
MadridMunichParisReadingViennaZurich
MIDDLE EASTAbu DhabiDubaiSOUTH AFRICACape TownJohannesburg
Asia
$A548mINCOME
10% OF TOTAL
3,445STAFF
ASIABangkokBeijingGurugramHong Kong
JakartaKuala LumpurManilaMumbaiSeoul
ShanghaiSingaporeTaipeiTokyo
Australia2
$A2,025mINCOME
38% OF TOTAL
6,241STAFF
AUSTRALIAAdelaideBrisbaneCanberra
Gold CoastManlyMelbourneParramatta
PerthSydneyNEW ZEALANDAuckland
Americas
$A1,305mINCOME
24% OF TOTAL
2,586STAFF
CANADACalgaryMontrealTorontoVancouverLATIN AMERICAMexico CityRibeirao PretoSao Paulo
USAAustinBoca RatonBostonChicagoDenverHoustonJacksonvilleLos Angeles
MinneapolisNashvilleNew YorkPhiladelphiaSan DiegoSan FranciscoSan Jose
12
• 62% of total income1 in 1H18 was generated offshore
• A 10% movement2 in AUD is estimated to have approx. 6% impact on NPAT
1. Net operating income excluding earnings on capital and other corporate items. 2. This represents an average movement against all major currencies.
Diversification by region
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
To
tal in
co
me
($
Am
)
-
600
1,200
1,800
2,400
Australia Asia Americas Europe, Middle East & Africa
1H16 2H16 1H17 2H17 1H18
13
MACQUARIE INFRASTRUCTURE
AND REAL ASSETS (MIRA)
MACQUARIE INVESTMENT
MANAGEMENT (MIM)
MACQUARIE SPECIALISED
INVESTMENT SOLUTIONS (MSIS)
• $A79.5b in equity under management, up
3% on Mar 17
• Raised $A6.2b in new equity, including new
commitments for listed and unlisted North
American and Australian infrastructure funds
• Invested equity of over $A5.0b across 7
acquisitions and 13 follow-on investments in 8
countries, including infrastructure in Australia,
US, Spain, UK, Philippines, Korea, India and
Italy and private concessions in Korea
• Equity proceeds from asset divestments2
of over $A4.8b in UK, US, Mexico and Asia
• Performance fees of $A530m from MEIF3,
MQA and other MIRA-managed funds and
co-investors
• Investment-related income included gains on
reclassification of certain infrastructure
investments
• $A11.3b of equity to deploy as at 30 Sep 17
• Ranked No.1 infrastructure manager globally3
• $A325.2b in assets under management,
up 2% on Mar 17, largely due to positive
market movements, partially offset by
unfavourable FX movements
• Strong performance across a range of
asset classes including Australian equities,
Emerging Markets equities and Global and
US Fixed Income
• Distribution highlights include new
institutional mandates and contributions
funded in:
- Australia: $A5.0b
- Asia: $A2.4b
- North America: $US1.2b
- EMEA: $US0.2b
• Launched two new funds in Macquarie
Professional Series, IPM Global Macro Fund
and P/E Global FX Alpha Fund
• Industry awards received include six awards
for Australian equities and four Lipper
Awards4; top 10 global insurance manager5
• Continued to grow the Macquarie
Infrastructure Debt Investment
Solutions (MIDIS) business:
- Closed 6 third party investor
commitments totalling $A1.1b,
bringing total commitments on
MIDIS platform to over $A7.8b
- Closed five investments totalling
$A0.5b in US, UK, France,
Hungary and Australia, bringing
total AUM to over $A5.1b
• Closed $A0.6b in new loans to
Private Equity Secondaries funds and
successfully completed sell down of
$A0.2b underwritten facility
Macquarie Asset Management
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups. 1. As at 30 Sep 17. 2. Equity proceeds from asset divestments differs to the impact of divestments on reported EUM which captures a reduction of the original capital commitment at time of return of capital to investors. 3. Willis Towers Watson 2017 Global Alternatives Survey, published 17 Jul 17.4. For more information and disclosures about these awards, visit: https://www.macquarieim.com/mimdisclosures. 5. Insurance Investment Outsourcing Report.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
%45MAM
NET PROFIT CONTRIBUTION
$A1,189m39%
ON 1H17
75%
ON 2H17
OPERATING INCOME
$A1,730m26%
ON 1H17
41%
ON 2H17
AUM1
$A471.9b 2%
ON MAR 17
14
ASSET FINANCE PRINCIPAL FINANCE1
• Asset Finance portfolio of $A29.9b, up 1% on Mar 17
• Continued to provide tailored finance and asset management
solutions throughout the customer value chain – from
manufacturer to end user: aircraft, vehicles, technology,
healthcare, manufacturing, industrial, energy, rail and
mining equipment
• Vehicles portfolio of $A17.4b, in line with Mar 17
• Aircraft leasing portfolio of $A8.3b, down 2% on Mar 17 due to
asset depreciation in the portfolio and the sale of three aircraft
• Telecoms, Media and Technology - growth in mobile device
finance programmes
• Energy - largest independent2 smart meter funder in UK; and a
specialist funder of energy efficient assets
• Resources - emerging opportunities in fleet replacement after
below trend industry capex
• Integration of small ticket originations and operations
through regional hubs
FUNDING ACTIVITY
• Continued use of diverse funding sources with 30% of the Asset
Finance portfolio funded externally
• Principal Finance’s funded loan portfolio of $A5.6b3, down
18% on Mar 17 due to net repayments and realisations
• $A0.7b of portfolio additions for 1H18 comprising:
- $A0.2b of new primary financings across corporate and real
estate, weighted towards bespoke originations
- $A0.5b of corporate loans and similar assets acquired in the
secondary market
• Notable transactions included:
- Providing £25m of financing to a specialist rehabilitation and
care services company
- Completion of co-acquisition with Macquarie Aviation of a
secondary loan portfolio secured by aviation assets
• Notable realisations included the early repayment of an
investment in one of the UK’s largest private owners of
residential property
• Asset quality remained sound and the portfolio continued to
generate strong overall returns
Corporate and Asset Finance
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups. 1. CAF Principal Finance formerly known as CAF Lending. 2. Not part of a distribution network or a vertically integrated utility. 3. Includes Real Estate Structured Finance legacy run-off portfolio and equity portfolio of $A0.4b.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
%23CAF
NET PROFIT CONTRIBUTION
$A619m19%
ON 1H17
9%
ON 2H17
OPERATING INCOME
$A931m11%
ON 1H17
7%
ON 2H17
ASSET AND LOAN PORTFOLIO
$A35.5b 3%
ON MAR 17
15
PERSONAL BANKING WEALTH MANAGEMENT BUSINESS BANKING
Provides a full retail banking product suite to
clients with mortgages, credit cards,
transaction and savings accounts. Serves
clients through direct Macquarie offerings, a
white label personal banking platform, strong
intermediary relationships and a leading
digital banking experience.
Provides clients with a wide range of wrap
platform and cash management services,
investment and superannuation products,
financial advice, private banking and
stockbroking. Delivers products and services
through institutional relationships, adviser
networks and dedicated direct relationships
with clients.
Provides a full range of deposit, lending and
payment solutions, as well as tailored
services to business clients, ranging from
sole practitioners to corporate professional
firms, who we engage with through a variety
of channels including dedicated
relationship managers.
Activity
• Australian mortgage portfolio of
$A29.9b, up 4% on Mar 17, representing
approximately 2% of the Australian market
• Named Best Digital Banking Offering
and Most Innovative Card Product at the
2017 Australian Retail Banking Awards
• Launched instant digital rewards program,
Macquarie Rewards
• Announced as strategic partner and issuer
of the new Myer Credit Card
Activity
• Funds on platform1 of $A78.9b, up 9%
on Mar 17
• Wealth accounts added to Macquarie’s
award winning digital banking application
to provide a view of wealth and investment
holdings in the one place
• Expanded Macquarie Wrap managed
accounts offering, with funds under
administration of $A0.8b, up 47% on
Mar 17
• 1H17 included the gain on sale of
Macquarie Life’s risk insurance business to
Zurich Australia Limited
Activity
• Business banking deposit volumes
up 5% on Mar 17
• Business banking loan portfolio of
$A7.1b up 9% on Mar 17
• Total business banking SME clients
up 3% on Mar 17
• Continued rollout of DEFT AuctionPay to
replace the need for cheques at auction
DEPOSITS
• Total BFS deposits2 of $A46.4b, up 4% on Mar 17
− CMA deposits of $A27.4b, up 5% on Mar 17
• Macquarie awarded Best Cash and Term Deposit Accounts at the 2017 SMSF Awards and Core Data SMSF Service Provider Awards
Banking and Financial Services
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups.1. Funds on platform includes Macquarie Wrap and Vision. 2. BFS deposits exclude corporate/wholesale deposits.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
%11BFS
NET PROFIT CONTRIBUTION
$A286m10%
ON 1H17
13%
ON 2H17
OPERATING INCOME
$A822m6%
ON 1H17
7%
ON 2H17
AUSTRALIAN CLIENT NUMBERS
MORE THAN 1 million
16
Commodity Markets
(Physical & Financial) 42%1
Financial Markets
(Primary & Secondary) 48%1
Futures
10%1
COMMODITY MARKETS
AND FINANCE
FIXED INCOME &
CURRENCIES
CREDIT
MARKETS
CASH EQUITIES
AND EQUITY
DERIVATIVES &
TRADING FUTURES
• Mixed results across the
commodities platform
• Lower volatility impacted client
hedging activity and trading results
in Global Oil, North American Gas
and Metals, partially offset by
stronger results in North American
Power, Bulk Commodities, Investor
Products and Agriculture
• 1H17 benefited from the sale of
equity holdings in energy-related
investments
• Completed the acquisitions of
Cargill Petroleum and Cargill North
America Power and Gas trading
businesses
• Strong result
across the platform
• Increased
client flows in
foreign exchange
and rates,
particularly in
Japan, EMEA
and North America
• Increased
client activity
in Australian
securitisation
• Steady client
activity in bespoke
lending and balance
sheet solutions
• Improved result
across the equities
platform
• Growth in
structured client
capital solutions
• Realisation of
benefits from cost
synergies following
the merger of CFM
and MSG
• No.1 in ANZ for
IPOs and ECM
follow-ons3
• No.1 market share
in listed warrants in
Singapore, No. 2 in
Malaysia, No.5 in
Thailand &
No.8 in Hong Kong4
• Strong results
across the platform
with consistent
client activity and
volumes
• Expansion of Asian
distribution through
Singapore branch
buildout and full
SGX membership
• Maintained strong
position in Australia,
ranked No.2 overall
market share in
ASX24 Futures5
Commodities and Global Markets
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups. 1. Percentages are based on net profit contribution before impairment charges. 2. Platts Q2 CY17. 3. Dealogic. 4. Net outstanding notional on local exchange. 5. ASX24 Futures volumes CY17 YTD as at 30 Sep 17.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
%14CGM
NET PROFIT CONTRIBUTION
$A378m23%
ON 1H17
21%
ON 2H17
OPERATING INCOME
$A1,321m11%
ON 1H17
10%
ON 2H17
US PHYSICAL GAS MARKETER
in North America2No.2
17
AUSTRALIA AND
NEW ZEALANDASIA AMERICAS EMEA
Activity
• Maintained the leading market
position in M&A2 and ECM3 during
a sustained period of lower deal
volumes
• Executed a number of large, cross-
border and local M&A transactions,
leveraging long-term relationships
• Continued focus on principal asset
creation across Infrastructure and
Green Energy
Notable deals
• Defence advisor to DUET in
response to the $A13.4b acquisition
of 100% of DUET's securities by
Cheung Kong Infrastructure - the
largest M&A deal in Australia
this year4
• Financial advisor to Boral on the
acquisition of Headwaters for
$A3.5b, following being joint lead
manager and underwriter in the prior
year to the associated $A2.1b equity
capital raising, the largest equity
raising in Australia in 20165
Awards/Rankings
• No.1 M&A for completed and
announced deals in ANZ2
• No.1 IPOs and ECM follow-ons
in ANZ3
Activity
• Facilitated cross border capital flows
between China and the rest of
the world
• Increased focus on principal asset
creation across Infrastructure, Green
Energy and Real Estate
Notable deals
• Acquisition of 100% ownership
interest in RES Japan, a Japanese
subsidiary of Renewable Energy
Systems Group, rebranded as
Acacia Renewables and focused on
developing a pipeline of onshore
wind energy projects
• Reached financial close on the
principal acquisition and debt raising
of two waste-to-energy assets in the
cities of Haman and Yeoju,
South Korea
• Joint purchasing agent for open
market purchases by Jardine
Strategic Holdings Limited to acquire
a significant minority shareholding of
Hong Kong listed Greatview Aseptic
Packaging for $HK1.5b
Activity
• Strong sponsor and record high
DCM activity
• Continued focus on principal asset
creation opportunities, realisations of
existing positions, and expansion into
businesses in niche areas
Notable deals
• Financial advisor and equity investor
in the restructuring and acquisition of
the 907MW Norte III combined cycle
gas plant in Juarez, Mexico
• Financial advisor to Waste Industries
on its sale to HPS Investment
Partners and Equity Group
Investments and joint bookrunner
and joint lead arranger on the
$US1.1b senior secured credit
facilities and $US305m senior
secured notes to support the
acquisition
• Joint bookrunner and joint lead
arranger on $US6.2b of senior
secured credit facilities to support the
acquisition of DH Corp by Misys, a
portfolio company of Vista Equity
Activity
• Strong performance across
Infrastructure and Green Energy
• Significant growth in German
Industrials
Notable deals
• Acquisition of the UK Green
Investment Bank plc from HM
Government for £2.3b, rebranded as
Green Investment Group and now
one of Europe’s largest teams of
green energy investment specialists
• Financial advisor to Bain Capital and
Cinven on their €5.4b acquisition of
STADA – the largest private equity
transaction in German M&A history6
• Sole financial and debt adviser to a
consortium on the acquisition of
100% of High Speed 1, the UK's first
high speed rail network7
Awards/Rankings
• No.1 Infra/Project Finance advisory
in EMEA8
• No.1 Project Finance sponsor
in EMEA9
• Most innovative investment bank for
Infrastructure and Project Finance10
Macquarie Capital
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on 1H18 net profit contribution from operating groups. 1. Prior period deal values and transaction numbers have been adjusted to reflect final transaction data. These changes are not material. 2. Dealogic (CY17, any Australian involvement, by number and value). 3. Dealogic (CY17, by value). 4. Dealogic (CY17, by value, completed M&A transactions). 5. Dealogic (FY17, by value). 6. Mergermarket (since 1998, by value). 7. Legal Week. 8. Inframation (CY17, by value). 9. IJGlobal (CY17, by value). 10. The Banker (2017).
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
%7MACCAP
NET PROFIT CONTRIBUTION
$A190m7%
ON 1H17
32%
ON 2H17
OPERATING INCOME
$A582m2%
ON 1H17
9%
ON 2H17
152 TRANSACTIONS VALUED AT
$A73bIN 1H18
212 transactions
$A65bIN 1H171
216 transactions
$A97bIN 2H171
18
Term liabilities exceed term assets
These charts represent Macquarie’s funded balance sheets at the respective dates noted above. For details regarding reconciliation of the funded balance sheet to Macquarie’s statutory balance sheet refer to slide 64. 1. ‘Other debt maturing in the next 12 months’ includes Structured Notes, Secured
Funding, Bonds, Other Loans, Loan Capital maturing within the next 12 months and Net Trade Creditors. 2. ‘Debt maturing beyond 12 months’ includes Loan Capital not maturing within next 12 months. 3. Non-controlling interests netted down in ‘Equity and hybrids’ and ‘Equity Investments and PPE’.
4. ‘Cash, liquids and self securitised assets’ includes self securitisation of RBA repo eligible Australian mortgages originated by Macquarie. 5. ‘Loan Assets (incl. op lease) < 1 year’ includes.Net Trade Debtors. 6. ‘Loan Assets (incl. op lease) > 1 year’ includes Debt Investment Securities. 7. ‘Equity
Investments and PPE’ includes Macquarie’s co-investments in Macquarie-managed funds and equity investments. 8. Total customer deposits as per the funded balance sheet ($A49.4b) differs from total deposits as per the statutory balance sheet ($A59.0b). The funded balance sheet excludes any
deposits which do not represent a funding source for Macquarie. 9. Issuances cover a range of tenors, currencies and product types and are AUD equivalent based on FX rates at the time of issuance and include undrawn facilities.
Funded balance sheet remains strong
30 Sep 17$Ab
TOTAL CUSTOMER DEPOSITS8
$A49.4b 3%FROM MAR 17
NEW TERM FUNDING9
$A8.2b RAISED IN 1H18
SYNDICATED LOAN FACILITIES
$A3.3b REFINANCED IN 1H18
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Ab 31 Mar 17
Equity investmentsand PPE 3,7 (8%)
Loan assets (incl. op lease)
> 1 year6 (33%)
Loan assets (incl. op lease)
< 1 year5 (11%)
Trading assets
(15%)
Cash, liquids and self
securitised assets 4 (33%)
ST wholesale issued
paper (10%)
Other debt maturing in the
next 12 months 1 (7%)
Customer deposits
(40%)
Debt maturing beyond
12 months 2 (30%)
Equity and hybrids 3
(13%)
ST wholesale issued paper (5%)
Other debt maturing in the
next 12 months 1 (9%)
Customer deposits
(40%)
Debt maturing beyond
12 months 2 (33%)
Equity and hybrids 3
(13%)Equity investmentsand PPE 3,7 (6%)
Loan assets (incl. op lease)
> 1 year 6 (33%)
Loan assets (incl. op lease)
< 1 year5 (11%)
Trading assets
(18%)
Cash, liquids and self
securitised assets 4 (32%)
19
Basel III capital position
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
• APRA Basel III Group capital at Sep 17 of $A18.1b, Group capital surplus of $A4.2b1
1. Calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110. The APRA Basel III Group capital surplus is $A5.6b calculated at 7% RWA, per the internal minimum Tier 1 ratio of the Bank Group. 2. ‘Harmonised’ Basel III estimates are calculated in
accordance with the BCBS Basel III framework. 3. $US250m of Macquarie Exchangeable Capital Securities (“ECS”) bought back in Jun 17. 4. Excluding foreign currency translation reserve. 5. Includes changes in business requirements, for example, Endeavour Energy, Land Services Group and the
acquisition of GIG. Also includes the net impact of hedging employed to reduce the sensitivity of the Group’s capital position to FX translation movements. 6. APRA Basel III ‘super-equivalence’ includes the impact of changes in capital requirements in areas where APRA differs from the BCBS Basel III
framework and includes full CET1 deductions for equity investments ($A0.6b); differences in mortgages treatment ($A0.6b); capitalised expenses ($A0.5b); investment into deconsolidated subsidiaries ($A0.2b); DTAs and other impacts ($A0.1b).
7.4
5.86.2 6.2
4.2 4.2
1.2
(0.3)
(1.3) (0.8)
(2.0)
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Harmonised Basel IIIat Mar 17
Hybrid Capital Buyback FY17 Final Dividend andMEREP
1H18 P&L andmovements in reserves
Business growth andother
Harmonised Basel IIIat Sep 17
APRA Basel III'super equivalence'
APRA Basel IIIat Sep 175 64
3
Based on 8.5%
(minimum Tier
1 ratio + CCB)
2
Group regulatory surplus: Basel III (Sep 17)$Ab
20
Strong regulatory ratios
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Bank Group (Sep 17)
1. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework. 2. Average LCR for Sep 17 quarter is based on an average of daily observations. 3. Includes the capital conservation buffer in the minimum CET1 ratio requirement. The minimum BCBS Basel III leverage ratio requirement of 3% is effective from 1 Jan 18. 4. APRA released final NSFR requirements at the end of 2016. The NSFR and associated changes to APRA ADI Prudential Standard 210 will be effective from 1 Jan 18.
153%
40%
70%
100%
130%
160%
190%
LCR
Bank Group (APRA)
2
11.0%
13.3%
-
3.5%
7.0%
10.5%
14.0%
17.5%
CET1 ratio
6.1%
6.9%
-
1.5%
3.0%
4.5%
6.0%
7.5%
Leverage ratio
Basel III minimum3
Bank Group (Harmonised )1
109%
90%
95%
100%
105%
110%
115%
NSFR4
21
• The Group’s capital position is strong with $A4.2b1 surplus at 30 Sep 17
• To provide additional flexibility to manage the Group’s capital position going forward, the Board has approved an
on-market buyback of up to $A1b, subject to a number of factors including the Group’s surplus capital position,
market conditions and opportunities to deploy capital by the businesses
• This buyback has received the necessary regulatory approvals
Share buyback
1. Calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
22
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Interim dividend
1. Shares may be issued if purchasing becomes impractical or inadvisable. The DRP pricing period is from 15 Nov 17 to 21 Nov 17.
1H18 PAYOUT RATIO
56%Dividend policy
remains 60-80%
annual payout
ratio
DRP shares for
the 1H18 dividend
to be sourced
on-market1
1H18 RECORD DATE
8 Nov 171H18 PAYMENT DATE
13 Dec 17
1H18 ORDINARY DIVIDEND
2.05(45% franked)
$A $A1.90in 1H17
from
(45% franked)
$A2.80in 2H17
from
(45% franked)
23
Board and management changes
• Effective 1 Nov 17, Glenn Stevens will be appointed to the Macquarie Group Limited and
Macquarie Bank Limited Boards as an independent director
• Mr Stevens worked at the highest levels of the Reserve Bank of Australia for
20 years, most recently as Governor between 2006 and 2016. He led policy decisions through
the global financial crisis, Australia’s mining boom, and an extended period of low interest rates
and developed Australia’s successful inflation targeting framework for monetary policy
• After 25 years of service, Stephen Allen has announced his intention to retire from his role as
Chief Risk Officer and Head of RMG and will step down from the Executive Committee on
31 Dec 17
• Patrick Upfold, Chief Financial Officer and Head of FMG, will succeed Mr Allen as Chief Risk
Officer and Head of RMG
• Alex Harvey, Global Head of Principal Transactions in Macquarie Capital, will succeed
Mr Upfold as Chief Financial Officer and Head of FMG, and will join the Executive Committee
• Both appointments will be effective 1 Jan 18
Glenn Stevens
Alex Harvey
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Result Analysis and Financial Management03 Patrick Upfold – Chief Financial Officer
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
25
1H18 $Am
2H17 $Am
1H17 $Am
Net interest and trading income 1,892 2,069 1,874
Fee and commission income 2,568 2,128 2,203
Net operating lease income 469 445 476
Share of net profits/(losses) of associates
and joint ventures103 59 (8)
Impairments charges (70) (42) (131)
Provisions for credit losses (72) (122) (149)
Other income 507 609 953
Net operating income 5,397 5,146 5,218
Employment expenses (2,261) (2,089) (2,290)
Brokerage, commissions and trading-related expenses
(422) (434) (418)
Other operating expenses (1,010) (1,004) (1,025)
Total operating expenses (3,693) (3,527) (3,733)
Operating profit before tax and non-controlling interests
1,704 1,619 1,485
Income tax expense (448) (430) (438)
Non-controlling interests (8) (22) 3
Profit attributable to MGL shareholders 1,248 1,167 1,050
• Net interest and trading income of $A1,892m, up 1% on 1H17 was mainly driven by:
– Volume growth in BFS loan and deposit portfolios and improved margins
– Reduced cost of holding long-term liquidity in Corporate
Partially offset by:
– reduced interest income from Macquarie Capital’s debt investment portfolio and higher funding costs
associated with the increase in principal investments (including the acquisition of GIG)
– Lower trading income in CGM as a result of lower market volatility
• Fee and commission income of $A2,568m, up 17% on 1H17 largely driven by higher performance fees
in MAM
• Net operating lease income of $A469m, down 1% with improved underlying income in CAF from Aviation,
Energy, and Technology portfolios offset by foreign exchange movements
• Share of net profits/(losses) of associates of $A103m, up from a loss of ($A8m) in 1H17 primarily due to
the improved underlying performance of investments held in Macquarie Capital
• Impairment charges of $A70m, down 47%. 1H17 included impairments in BFS and Macquarie Capital
• Provisions for credit losses of $A72m, down 52% on 1H17 reflecting improved performance of underlying
credit portfolios and reversal of collective provisions in CAF Principal Finance as a result of a reduction in
book size
• Other income of $A507m, down 47% on 1H17 with lower principal gains in Macquarie Capital and CGM,
and the non-recurrence on the gain on sale of Macquarie Life’s risk insurance business in 1H17 by BFS
• Employment expenses of $A2,261m, down 1% on 1H17 driven by lower average headcount and
favourable foreign currency movements, partially offset by higher performance-related profit share
• Other operating expenses of $A1,010m, down 1% on 1H17 due to reduced project activity in BFS and the
realisation of benefits from cost synergies following the merger of CFM and MSG. This was partially offset
by transaction, integration and ongoing costs associated with the GIG acquisition in Macquarie Capital
• Income tax expense of $A448 million increased 2% due to higher profit before tax. Effective tax rate of
26.4% was broadly in line with 2H17 (26.9%), reflecting the geographic mix and nature of earnings
Income Statement key drivers
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
26
Income Statement by Operating Group
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Net
pro
fit
co
ntr
ibu
tio
n (
$A
m)
1,050
332
98
25
(112) (15)
(120) (10)
1,248
-
200
400
600
800
1,000
1,200
1,400
1,600
1H17 NPAT MAM CAF BFS CGM MacCap Corporate (excl.tax expense)
Tax expense 1H18 NPAT
271. Represents movement in net gains on sale and reclassification of debt and equity investments and non-financial assets, share of net profits of associates and joint ventures accounted for using the equity method, and dividend and distribution income.
KEY DRIVERS
• Higher performance fees with 1H18 benefiting from fees from
MEIF3, MQA and other MIRA-managed funds and co-investors
• Underlying base fees up:
– Increased fees as a result of investments made by MIRA-
managed funds, growth in the MSIS Infrastructure Debt
business and positive market movements in MIM AUM
– Partially offset by asset realisations by MIRA-managed funds,
net flow impacts in the MIM business and foreign exchange
• Investment-related income, which includes gains from sale and
reclassification of certain infrastructure investments, and equity
accounted income, broadly in line with 1H17
Macquarie Asset ManagementStrong result; 1H18 benefiting from strong performance fees
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
857
367
5 (6) (34)
1,189
-
200
400
600
800
1,000
1,200
1,400
1H17 NPC Higher performance fees
Stable base fees Investment-related income
Other 1H18 NPC
$Am5
Underlying
base feesFX impact on
base fees
21 (16)
1
FX impact on base fees
Underlying base fees
28
MAM AUM movement
MIM +$A5b
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MIRA ($A12b)2 MSIS ($A1b)3 MAM $A472bMAM $A480b
1. Includes movement in contractual insurance assets. 2. Includes divestment of Thames Water by MIRA-managed funds and ceasing asset services to consortia investors ($A25b). 3. MIDIS increase offset by maturing Australian retail products. 4. MIRA tracks its funds under management using an
EUM measure as base management fee income is typically aligned with EUM. EUM and AUM are calculated under different methodologies and as such, EUM movement is the more relevant metric for analysis purposes – refer to MIRA EUM movement on slide 29. MIRA’s total EUM includes market
capitalisation at measurement date for listed funds, the sum of original committed capital less capital subsequently returned for unlisted funds and mandates as well as invested capital for managed businesses. AUM is calculated as proportional enterprise value at measurement date including equity
value and net debt of the underlying assets of funds and managed assets. AUM excludes uninvested equity in MIRA. Refer MD&A s7.1 & 7.2 for further information with respect to EUM and AUM measures.
(6) (12)(1)
1 10
MIRA $A154b MIRA $A142b
MIM $A320b
MIM $A325b
MSIS $A6bMSIS $A5b
-
100
200
300
400
500
600
31 Mar 17 Net flows¹ Market movements FX impacts MIRA movement(see EUM )
MSIS movement 30 Sep 17
$Ab
4
29
MIRA EUM movement
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
1. Committed capital returned by unlisted funds or under mandates due to asset divestments, redemption or other capital distributions as well as capital no longer managed due to sale of management rights or expiry of asset management agreements. 2. FX reflects the movement in EUM driven by
changes in FX rates. EUM is calculated using capital commitments translated at period end FX rates. Spot FX rates are used for capital raised and returned and average FX rates are used for security price movements.
$Ab
77.2 79.5
(0.3)
(6.7)6.2
2.2
0.9
-
10
20
30
40
50
60
70
80
90
31 Mar 17EUM
Capital raised Acquisition of GIB Listed security pricemovements
Capital returned or no longermanaged¹
FX² 30 Sep 17EUM
Acquisition of GIG
30
KEY DRIVERS
• Increased income from Asset Finance due to improved underlying
contributions from Aviation, Resources and Energy portfolios,
partially offset by unfavourable FX movements. Vehicles
contribution broadly flat
• Increased income from Principal Finance with higher prepayments,
realisations and investment-related income, partially offset by lower
interest income as a result of a reduction in portfolio size
• Lower impairments reflecting net loan repayments (partial reversal
of collective provisions) and improved credit performance of
underlying portfolios
• Other movement largely reflects reduced gains from the sale
of aircraft
Corporate and Asset FinanceHigher Asset Finance and Principal Finance income and lower impairments
$Am
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
521
22 25
62
(11)
619
-
100
200
300
400
500
600
700
1H17 NPC Higher Asset Financeincome
Higher PrincipalFinance income
Lower impairments Other 1H18 NPC
$Am
311. 1H17 included impairment charge on equity investments ($A15m), intangibles ($A10m) and Core Banking project impairments ($A19m). 2. Income relating to businesses sold in 1H17 which includes the sale of Macquarie Life’s risk insurance business to Zurich Australia Limited, the sale of the US
mortgages portfolio and the continued run down of the Canadian mortgage portfolio.
KEY DRIVERS
• 1H17 impacted by:
– net overall gain on the disposal of Macquarie Life’s risk
insurance business to Zurich Australia Limited and the US
mortgages portfolio
– A change in approach to the capitalisation of software
expenses in relation to the Core Banking platform and non-
recurring technology spend
– Impairment of certain equity positions and impairments of
intangibles relating to the Core Banking platform
• 1H18 experienced lower credit provisions compared to 1H17
• Underlying Business growth in 1H18:
– Average Australian loan portfolio increased 3% on 1H17
driven by average business lending growth of 11% and a 5%
increase in the average Australian mortgages portfolio
– Average BFS deposits volumes increased 11%
– NIM increased across Australian mortgages, business lending
portfolios and BFS deposits
Banking and Financial ServicesStrong business growth across the portfolio
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Am$Am
261
(191)
77
46
24
(10)
79
286
-
50
100
150
200
250
300
350
1H17 NPC Lower net gain ondisposal ofbusinesses
Accelerated andincreased
technology relatedexpenses andother items in
1H17
Lower equity andother
impairments¹
Lower creditprovisions
Reducedunderlying incomefrom businesses
sold²
Business growth 1H18 NPC
32
KEY DRIVERS
• Lower investment-related income with 1H17 benefiting from gains on sale of
a number of investments, mainly in energy and related sectors
• Net interest and trading income (net of associated expenses):
– Commodities:
° Risk management products down $A36m reflecting lower volatility
resulting in reduced client activity and trading opportunities
° Lending and financing down $A34m, largely due to a reduction in
average loan balances in oil and gas sectors due to the wind down of
residual Metals, Energy Capital and other legacy portfolios
° Inventory management, transport and storage in line with 1H17
– Increased interest rates and foreign exchange income underpinned by
strong contributions from FX and interest rate markets in Japan, EMEA,
and North America. Credit remains subdued
– Equities up reflecting improvements in Asia following challenging
conditions in 1H17 and strong demand for structured client capital
solutions
• Lower operating expenses reflecting reduced commodity-related trading
activity, reduced average headcount and associated activity, and realisation
of benefits from cost synergies following the merger of CFM and MSG
• Movement in Other reflects lower equities-related brokerage and
commission fee income largely offset by increased equity accounted income
as a result of improved performance of the underlying portfolio of
investments
Commodities and Global MarketsLower result with 1H17 benefiting from strong investment-related income
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Am
Commodities
490
(129)
(36)
(34) - 14 25
51
(3)
378
-
100
200
300
400
500
600
1H17 NPC LowerInvestment-related
income
Lower Riskmanagement
products
Lower Lending andfinancing
Inventorymanagement,transport andstorage in line
Higher Credit,interest rates and
FX
Higher Equities netinterest and trading
income
Lower operatingexpenses
Other 1H18 NPC
1. Represents movement in net gains on sale and reclassification of debt and equity investments and non-financial assets.
1
331. Includes movements in share of net profits/(losses) of associates and joint ventures accounted for using the equity method, net gains on sale and reclassification of equity and debt investments, net interest and trading income (which represents the interest earned from debt investments and the funding
costs associated with Macquarie Capital’s investments and funding of DCM portfolio), other income and non-controlling interests.
KEY DRIVERS
• Increased fee income:
– M&A: lower fee income in the US and Asia, partially offset by
higher income in Australia
– ECM: reflects subdued conditions in Australia
– DCM: higher fee income in the US due to increased client activity
• Investment-related income (excluding non-controlling interests)
down on 1H17:
– Lower gains on sale of investments
– Decreased net interest reflecting lower interest income from the
debt investment portfolio and higher funding costs for principal
investments (including the acquisition of GIG)
– Partially offset by an increase in equity accounted income as a
result of the improved underlying performance of investments
• Lower impairment charges with 1H17 impacted by a small number
of underperforming principal investments
• Other includes transaction, integration and ongoing costs
associated with the acquisition of GIG and higher operating
expenses from increased principal activity
Macquarie CapitalLower impairments and higher fees offset by lower investment-related income
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
205
(52)
(6)
76 (83)72
(22)
190
-
50
100
150
200
250
1H17 NPC Lower M&A feeincome
ECM fee incomebroadly in line
Increased DCMfee income
Lower principalincome¹
Lowerimpairments
Other 1H18 NPC
$Am $A18m
Lower
investment-
related
income¹
34
Impairment expense
• Decrease in CAF reflecting net loan repayments
(reversal of collective provisions) and improved credit
performance of underlying portfolios
• Decrease in BFS with 1H17 impacted by the
underperformance of certain equity positions,
impairments of intangibles relating to the Core
Banking platform and higher business lending
provisions on a small number of loans
• Decrease in Macquarie Capital with 1H17 impacted by
a small number of underperforming principal
investments
• Corporate includes impairments relating to legacy
assets
Note: Impairment expense includes collective allowance for credit losses, specific provisions and write-offs, impairment charge on non-financial assets, and impairment charge on investment securities available for sale, interest in associates and joint ventures.
KEY DRIVERS
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Am
280
15
(62)
(70)
5
(72)46
142
-
50
100
150
200
250
300
350
1H17 MAM CAF BFS CGM MacCap Corporate 1H18
35
Regulatory project spend1H18 $Am
2H17$Am
1H17 $Am
Basel III and liquidity 4 7 5
OTC reform 5 13 9
MiFID II 10 5 1
Other Regulatory Projects (e.g. Privacy, Managed Investment) 36 21 24
Sub-total 55 46 39
Business as usual compliance spend
1H18
$Am
2H17
$Am
1H17
$Am
Financial, Regulatory & Tax reporting and Compliance 54 57 58
Compliance policy and oversight 44 38 41
AML Compliance 16 12 12
Regulatory Capital Management 9 9 8
Regulator Levies 8 - 6
Other Compliance functions (e.g. Privacy, Super, Consumer
Protection)34 32 46
Sub-total 165 148 171
Total compliance spend 220 194 210
• The industry continues to see an increase in
regulatory initiatives, resulting in increased
compliance requirements across all levels of the
organisation
• Direct cost of compliance approx. $A220m in 1H18
(excluding indirect costs), up on 1H17
• Project spend has increased during 1H18,
as a result of new projects
Costs of compliance
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
36
• Balance sheet remains solid and conservative
– Term assets covered by term funding, stable deposits and equity
– Minimal reliance on short-term wholesale funding markets
• Total customer deposits1 continuing to grow, up 3% to $A49.4b as at Sep 17 from $A47.8b as at Mar 17
• $A8.2b2 of term funding raised during 1H18:
– $A3.3b MGL loan facilities3
– $A2.2b mortgage and motor vehicle/equipment secured funding
– $A1.9b private placement issuance
– $A0.8b MGL secured trade finance facility
Balance sheet highlights
1. Total customer deposits as per the funded balance sheet ($A49.4b) differs from total deposits as per the statutory balance sheet ($A59.0b). The funded balance sheet excludes any deposits which do not represent a funding source for Macquarie. 2. Issuances are AUD equivalent based on FX rates at the time of issuance and represent full facility size. 3. Includes $A3.2b Senior Credit Facility refinance and upsize and $A0.1b addition to the existing MGL Asian Bank Facility refinanced in FY17.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
37
-
5
10
15
20
25
30
35
FY14 FY15 FY16 FY17 1H18 <1 yr 1-2yrs 2-3yrs 3-4yrs 4-5yrs >5yrs
Debt Loan Capital Equity & Hybrid AWAS Acquisition Facility Esanda Syndicated Facility
Diversified issuance strategy
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Tenor TypeCurrency
Note: All data presented in these charts represents drawn facilities. 1. Equity has been allocated to the AUD currency category. 2. Securitisations have been presented on a behavioural basis and represent funding expected to mature in >1yr. 3. Issuances and Maturities exclude securitisations and
other secured finance. Issuances are converted to AUD at the 30 Sep 17 spot rate. Maturities shown are as at 30 Sep 17.
• Well diversified issuance
and funding sources
• Term funding beyond 1 year
(excluding equity and securitisations)
has a weighted average maturity
of 4.2 years
Term Issuance and Maturity Profile3
Sep 17: Weighted average maturity 4.2 years$Ab
Term funding as at 30 Sep 17 – diversified by currency1, tenor2 and type
Issuances Maturities
Private Placement
6%
Secured Funding
4%
Senior Unsecured35%
Subordinated debt8%
Syndicated loan facility7%
Covered Bonds1%
PUMA RMBS 6%
SMART ABS7%
Equity & Hybrids
26%
AUD45%
USD42%
EUR6%
GBP2%CHF
2%JPY2%OTH1%
1-2yrs14%
2-3yrs14%
3-4yrs11%
4-5yrs6%
>5yrs43%
Securitisations > 1 yr12%
38
• Macquarie has been successful in pursuing its strategy of diversifying its funding sources
through growing its deposit base
– In excess of 1 million BFS clients, of which approx. 560,000 are depositors
– Focus on the composition and quality of the deposit base
– Continue to grow deposits in the CMA product, which has an average account balance of approx. $A45,000
Continued customer deposit growth
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Note: Total customer deposits include BFS deposits of $A46.4b and $A3.0b of Corporate/Wholesale deposits.
Customer deposits
31.6 33.9 36.2 36.9 39.7 43.6 47.8 49.4
-
10
20
30
40
50
Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Sep 17
$Ab
39
Operating
Group Category
Sep 17
$Ab
Mar 17
$Ab Description
CAF
Asset Finance2 23.5 22.2
Secured by underlying financed assetsFinance lease assets 13.6 12.2
Operating lease assets 9.9 10.0
Principal Finance3 5.7 6.6Diversified corporate and real estate lending portfolio, predominately consisting of loans which are senior, secured, well
covenanted and with a hold to maturity horizon
Total CAF 29.2 28.8
BFS
Retail Mortgages2,4 25.4 23.5
Secured by residential property and predominately supported by mortgage insuranceAustralia 25.4 23.0
Canada, US and Other - 0.5
Business Banking4 7.7 7.1
Secured relationship managed loan portfolio to professional and financial services firms, real estate industry clients, insurance
premium funding, mortgages to Business Banking clients and other small business clients. Secured largely by real estate,
working capital, business cash flows and credit insurance. The portfolio also includes other retail lending including credit cards
Total BFS 33.1 30.6
CGMResources and commodities 2.6 2.5 Diversified loan portfolio primarily to the resources sector that are secured by the underlying assets
Other 2.3 2.8 Predominately relates to recourse loans to financial institutions, as well as financing for real estate and other sectors
Total CGM 4.9 5.3
MAM Structured investments 2.2 2.0Loans to retail and wholesale counterparties that are secured against equities, investment funds or cash, or are protected
by capital guarantees at maturity
MacCap Corporate and other lending 0.7 0.8 Includes secured corporate lending
Total loan and lease assets per funded balance sheet5 70.1 67.5
Loan and lease portfolios1 – Funded Balance Sheet
1. Loan assets are reported on a funded balance sheet basis and therefore exclude certain items such as assets that are funded by third parties with no recourse to Macquarie. In addition, loan assets at amortised cost per the statutory balance sheet of $A76.9b at 30 Sep 17 ($A76.7b at 31 Mar 17) are adjusted to include fundable assets not classified as loans on a statutory basis (e.g. assets subject to operating leases which are recorded in Property, Plant and Equipment and loans booked in Fair Value through P&L in the statutory balance sheet). 2. Australian Retail Mortgages per the funded balance sheet of $A25.4b differs from the figure disclosed on slide 15 of $A29.9b and Asset Finance per the funded balance sheet of $A23.5b differs from the figure disclosed on slide 14 of $A29.9b. The funded balance sheet nets down loans and funding liabilities of non-recourse securitisation and warehouse vehicles to show the net funding requirement. 3. Principal Finance per the funded balance sheet of $A5.7b includes property and related assets and differs from the figure disclosed on slide 14 of $A5.6b. 4. Securitised business banking portfolio with underlying residential mortgages was included in Retail Mortgages: Australia and has been reclassed to business banking and restated accordingly in Mar 17. 5. Total loan assets per funded balance sheet includes self securitised assets.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
40
Category
Carrying value2
Sep 17
$Ab
Carrying value2
Mar 17
$Ab Description
Macquarie Asset Management (MIRA)
managed funds
1.9 1.6 Includes Macquarie Infrastructure Company, Macquarie Atlas Roads, Macquarie SBI
Infrastructure Fund, MPF Holdings Limited, Macquarie Korea Infrastructure Fund, Macquarie
European Infrastructure Fund 4
Investments acquired to seed new MIRA
products and mandates
1.4 0.6 Includes held for sale investments acquired to seed new MIRA products and mandates.
Balance includes a range of investments including Cadent Gas (gas distribution network in
the UK) and other various investments
Other Macquarie managed funds 0.5 0.5 Includes MIM funds as well as investments that hedge directors’ profit share plan liabilities
Transport, industrial and infrastructure 0.9 0.6 Over 35 separate investments, increase includes new investments in the infrastructure sector
in MacCap
Telcos, IT, media and entertainment 0.7 0.6 Over 40 separate investments
Energy, resources and commodities 1.7 0.6 Over 80 separate investments. Increase due to a number of additional investments mainly in
MacCap, which included assets associated with GIG and a combined cycle gas plant
Real estate investment, property and funds
management
0.1 0.1 Over 15 separate investments
Finance, wealth management and
exchanges
0.4 0.4 Includes investments in fund managers, investment companies, securities exchanges and
other corporations in the financial services industry
7.6 5.0
Equity investments of $A7.6b1
1. Equity investments per the statutory balance sheet of $A9.3b (Mar 17: $A7.2b) have been adjusted to reflect the total economic exposure to Macquarie. 2. Total funded equity investments of $A7.7b (Mar 17: $A5.5b), less available for sale and associates’ reserves of $A0.1b (Mar 17: $A0.5b).
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
41
• Finalisation of Basel III
– The Basel Committee has delayed the finalisation of proposals to amend the calculation of certain risk weighted assets under
Basel III. Any impact on capital will depend upon the final form of the proposals and local implementation by APRA
– APRA has delayed until at least 1 Jan 19 the implementation of a new standardised approach for measuring counterparty credit
risk exposures on derivatives (SA-CCR) and capital requirements for bank exposures to central counterparties
– APRA has also announced that it does not expect to finalise a new market risk standard1 until at least 2020, with
implementation from 2021 at the earliest
• APRA’s ‘Unquestionably Strong’ proposal
– APRA provided guidance around CET1 capital ratios for Australian banks to be considered ‘unquestionably strong’ and intends
to release further details on how the new requirements will be implemented later this year
– APRA has indicated2 that the implementation of the proposal will incorporate changes to the prudential framework resulting
from the finalisation of Basel III
– Based on existing guidance, Macquarie’s surplus capital position remains sufficient to accommodate any additional
requirements
Regulatory update
Note: The Basel Capital Framework applies to the Bank Group only. 1. Also known as the Fundamental Review of the Trading Book. 2. APRA’s information paper published Jul 17: ‘Strengthening banking system resilience – establishing unquestionably strong capital ratios’.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
42
Bank Group Basel III Common Equity Tier 1 (CET1) Ratio
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
• APRA Basel III CET1 ratio: 11.0%1
• Harmonised Basel III CET1 ratio: 13.3%2
1. Basel III applies only to the Bank Group and not the Non-Bank Group. APRA Basel III Tier 1 ratio at Sep 17: 12.9%. APRA Basel III CET1 ratio at Mar 17: 11.1%. 2. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework. Harmonised Basel III Tier 1 ratio at
Sep 17: 15.2%. 3. Excluding foreign currency translation reserve. 4. Includes changes in business requirements and the net impact of hedging employed to reduce the sensitivity of the Group’s capital position to FX translation movements. 5. APRA Basel III ‘super-equivalence’ includes the impact of
changes in capital requirements in areas where APRA differs from the BCBS Basel III framework and includes full CET1 deductions for differences in the treatment of mortgages (0.9%); equity investments (0.5%); capitalised expenses (0.5%); investment into deconsolidated subsidiaries (0.2%); DTAs
and other impacts (0.2%).
12.7% 12.7% 13.3%
11.1%
13.3% 13.3%
11.0%
0.6%
0.1%
(0.7%)(2.3%)
0%
2%
4%
6%
8%
10%
12%
14%
Harmonised Basel IIIat Mar 17
FY17 MBL to MGL Dividend 1H18 P&L and movementsin reserves
Other Harmonised Basel IIIat Sep 17
APRA Basel III'super equivalence'
APRA Basel IIIat Sep 17
CCB (2.5%)Basel III minimum CET1 (4.5%)
Bank Group Common Equity Tier 1 Ratio: Basel III (Sep 17)
3
4
5
43
• 153% average LCR for Sep 17 quarter, based on daily observations
– Maintained well above regulatory minimums
– Includes APRA approved AUD CLF allocation of $A5.0b for 2017 calendar year
• Reflects long-standing conservative approach to liquidity management
• $A30.1b of unencumbered liquid assets and cash on average over the quarter to Sep 17 (post applicable haircuts)
1. Unencumbered Liquid Asset Portfolio represents the quarterly average of these balances.
Strong liquidity position maintained
Unencumbered Liquid Asset Portfolio1 MBL LCR position
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
168% 163% 153%
0%
50%
100%
150%
200%
Mar 17 Qtr Jun 17 Qtr Sep 17 Qtr
Regulatory
Minimum
13.8 12.7 13.5
2.8 2.8 3.9
5.0 5.0 5.0
7.9 8.0 7.7
Mar 17 Qtr Jun 17 Qtr Sep 17 Qtr
HQLA Available Cash CLF Surplus CLF Collateral
$A29.5b $A28.5b$A30.1b
44
• Share purchases since 31 Mar 17
- FY17 MEREP $A373m was purchased – $A260m off-market under the staff sale arrangements and $A113m
on-market, with a combined weighted average price of $A89.25
• Following the issuance of $US750m MACS hybrid capital in Mar 17, MBL (London Branch) completed a $US250m
buyback of ECS hybrid capital in Jun 17. ECS were delisted from the SGX on 22 Jun 17
• The Board has resolved that no discount will apply for the 1H18 DRP and the shares are to be acquired
on-market1
• To provide additional flexibility to manage the Group’s capital position going forward, the Board has approved an
on-market buyback of up to $A1b, subject to a number of factors including the Group’s surplus capital position,
market conditions and opportunities to deploy capital by the businesses
Capital management update
1. Shares may be issued if purchasing becomes impractical or inadvisable. The DRP pricing period is from 15 Nov 17 to 21 Nov 17.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Outlook04 Nicholas Moore – Managing Director and Chief Executive Officer
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
46
FY18 combined net profit contribution from operating groups expected to be slightly up on FY17
Factors impacting short-term outlook
Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Corporate and Asset Finance
• FY17: $A1.2b up 6% on FY16
• Leasing book broadly in line
• Reduced loan volumes in Principal Finance
• Timing and level of early prepayments and realisations
in Principal Finance
Macquarie Asset Management
• FY17: $A1.5b down 6% on FY16
• Base fees expected to be broadly in line
• 2H18 performance fees expected to be lower than 1H18
Banking and Financial Services
• FY17: $A0.5b up 47% on FY16
• Higher loan portfolio, deposit and platform volumes
Annuity-style businesses Capital markets facing businesses
Macquarie Capital
• FY17: $A0.5b up 7% on FY16
• Assume market conditions broadly consistent with
1H18
• Solid pipeline of Principal realisations expected
• GIG acquisition completed
Commodities and Global Markets
• FY17: $A1.0b up 15% on FY16
• Strong customer base expected to drive consistent
flow across Commodities, Fixed Income and Futures;
albeit subdued market conditions in Commodities
• Lower levels of impairments and investment-related
income expected
• Cargill acquisitions completed
Corporate
• Compensation ratio to be consistent with historical levels
• Based on present mix of income, currently expect FY18 tax rate to be broadly
in line with 1H18
CGM
MacCap
BFS
CAF
MAM
FY17
47
• We currently expect the FY18 combined net profit contribution1 from operating groups to be slightly up on FY17
• The FY18 tax rate is currently expected to be broadly in line with 1H18
• Given substantial performance fees were recognised in 1H18, we expect the 2H18 result to be down on 1H18
and broadly in line with 2H17
• Accordingly, the Group’s result for FY18 is currently expected to be slightly up on FY17
• Our short-term outlook remains subject to:
– Market conditions
– The impact of foreign exchange
– Potential regulatory changes and tax uncertainties
Short-term outlook
1. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax.
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
48
• Macquarie remains well positioned to deliver superior performance in the medium-term
• Deep expertise in major markets
• Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions
– Annuity-style income is provided by three significant businesses which are delivering superior returns following
years of investment and recent acquisitions
– Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services
– Two capital markets facing businesses well positioned to benefit from improvements in market conditions with
strong platforms and franchise positions
– Commodities and Global Markets and Macquarie Capital
• Ongoing benefits of continued cost initiatives
• Strong and conservative balance sheet
– Well matched funding profile with minimal reliance on short-term wholesale funding
– Surplus funding and capital available to support growth
• Proven risk management framework and culture
Medium-term
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
49
Approximate business Basel III Capital & ROE
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Operating GroupAPRA Basel III Capital
1
@ 8.5% ($Ab)Approx. 1H18 Return
on Ordinary Equity2
Approx. 11-Year Average
Return on Ordinary Equity2
Annuity-style businesses 8.6
Macquarie Asset Management 2.0
28% 20%3Corporate and Asset Finance 4.2
Banking and Financial Services 2.4
Capital markets facing businesses 5.3
Commodities and Global Markets 3.011% 15% - 20%
Macquarie Capital 2.3
Total regulatory capital requirement @ 8.5% 13.9
Group surplus 4.2
Total APRA Basel III capital supply 18.14
1. Business Group capital allocations are indicative and are based on allocations as at 30 Jun 17 adjusted for material movements over the Sep 17 quarter. 2. NPAT used in the calculation of approx. annualised ROE is based on operating group’s net profit contribution adjusted for indicative allocations of profit share, tax and other corporate expenses. Accounting equity is attributed to businesses based on regulatory capital requirements. 11-year average covers FY07 to FY17, inclusively. 3. CAF returns prior to FY11 are excluded from the 11-year average as they are not meaningful given the significant increase in scale of CAF’s platform over this period. 4. Comprising of $A15.4b of ordinary equity and $A2.7b of hybrids.
As at 30 Sep 17
50
Medium-term
Macquarie Asset Management (MAM)
• Annuity-style business that is diversified across regions, products, asset classes and investor types
• Diversification of capabilities allows for the business to be well placed to grow assets under management in different market conditions
• Well positioned for organic growth with several strongly performing products and an efficient operating platform
Corporate and Asset Finance (CAF)
• Leverage deep industry expertise to maximise growth potential in asset and loan portfolio
• Positioned for further asset acquisitions and realisations, subject to market conditions
• Funding from asset securitisation throughout the cycle
Banking and Financial Services (BFS)
• Strong growth opportunities through intermediary and direct retail client distribution, white labelling, platforms and client service
• Opportunities to increase financial services engagement with existing business banking clients and extend into adjacent segments
• Modernising technology to improve client experience and support growth
Commodities and Global Markets (CGM)
• Opportunities to grow commodities business, both organically and through acquisition
• Development of institutional coverage for specialised credit, rates and foreign exchange products
• Increase financing activities
• Growing the client base across all regions
• Well positioned for a recovery in equity markets activity by leveraging a strong market position in Asia-Pacific through investment in the equities platform and
further integration of the business across CGM
Macquarie Capital (MacCap)
• Positioned to benefit from any improvement in M&A and capital markets activity
• Continues to tailor the business offering to current opportunities, market conditions and strengths in each region
Annuity-
style
businesses
Capital
markets
facing
businesses
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Presentation to investors and analysts
27 October 2017
Result announcement for the half-year ended 30 September 2017
MACQUARIE 2017
Detailed result commentaryAAPPENDIX
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
53
1. Includes net gains on sale and reclassification of debt and equity investments and non-financial assets, share of net profits of associates and joint ventures accounted for using the equity method, and dividend and distribution income. 2. Management accounting profit before unallocated corporate
costs, profit share and income tax.
1H18 $Am
2H17 $Am
1H17 $Am
Base fees 795 784 790
Performance fees 537 94 170
Other fee and commission income 114 124 105
Investment and other income1 284 221 308
Net operating income 1,730 1,223 1,373
Brokerage, commission and
trading-related expenses(123) (103) (97)
Other operating expenses (420) (438) (419)
Total operating expenses (543) (541) (516)
Non-controlling interests 2 (1) -
Net profit contribution2 1,189 681 857
AUM ($Ab) 471.9 480.0 491.3
Headcount 1,581 1,559 1,517
• Base fees of $A795m, broadly in line with 1H17
– Underlying base fees up on 1H17 as a result of investments made by MIRA-managed
funds, growth in the MSIS Infrastructure Debt business and positive market movements
in MIM AUM
– Partially offset by asset realisations by MIRA-managed funds, net flow impacts in the
MIM business and foreign exchange impacts
• Performance fees of $A537m, up on 1H17
– 1H18 included performance fees from MEIF3, MQA and other MIRA-managed funds and
co-investors
– 1H17 included performance fees from MQA, MKIF, Australian managed accounts and
from co-investors in respect of infrastructure assets
• Other fee and commission income of $A114m, up 9% on 1H17 due to higher fees from
MSIS Retail and True Index income
• Investment and other income of $A284m
– Investment-related income, which includes gains from sale and reclassification of certain
infrastructure investments, and equity accounted income, broadly in line with 1H17
• Total operating expenses of $A543m, up 5% on 1H17 driven by higher brokerage and
commission expense in MSIS Retail
Macquarie Asset Management
Result
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
54
1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group’s statutory P&L. 2. Includes investment and loan impairments. 3. Management accounting profit before unallocated corporate costs, profit share and
income tax. 4. Includes equity portfolio of $A0.4b (FY17: $A0.4b).
1H18 $Am
2H17 $Am
1H17 $Am
Net interest and trading income1 336 358 354
Net operating lease income 465 437 467
Impairments and provisions2 1 (50) (61)
Fee and commission income 22 32 21
Other income 107 219 54
Net operating income 931 996 835
Total operating expenses (312) (319) (315)
Non-controlling interests - - 1
Net profit contribution3 619 677 521
Loan and finance lease portfolio4 ($Ab) 25.6 26.5 28.1
Operating lease portfolio ($Ab) 9.9 10.0 10.0
Headcount 1,263 1,258 1,347
• Net interest and trading income of $A336m, down 5% on 1H17
– Reduction in Principal Finance portfolio size, partially offset by increased income from
prepayments and realisation of loan assets
• Net operating lease income of $A465m, broadly in line with 1H17
• Impairments and provisions down on 1H17 due to impact of loan repayments and
improvement in underlying portfolios
• Other income of $A107m up 98% on 1H17
– 1H18 includes a gain on reclassification of an asset held in the Principal Finance
business, partially offset by reduced gains on sale of aircraft in 1H18 compared
to 1H17
– Prior period included a gain realised on the sale a US toll road by the Principal
Finance business
• Total operating expenses of $A312m broadly in line with 1H17
Corporate and Asset Finance
Result
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
55
1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury and deposit premium paid to BFS by Group Treasury for the generation of deposits, that are eliminated on consolidation in the Group’s statutory P&L. 2. Includes investment and loan impairments.
3. Management accounting profit before unallocated corporate costs, profit share and income tax. 4. Funds on platform includes Macquarie Wrap and Vision. 5. The Australian loan portfolio comprises residential mortgages, loans to Australian businesses, insurance premium funding and credit
cards. 6. The legacy loan portfolios primarily comprise residential mortgages in Canada and the US. 7. BFS deposits excludes corporate/wholesale deposits.
1H18 $Am
2H17 $Am
1H17 $Am
Net interest and trading income1 584 551 498
Fee and commission income 234 216 256
Wealth management fee income 168 154 159
Banking fee income 66 62 70
Life insurance income - - 27
Net gain on disposal of businesses 1 - 192
Impairments and provisions2 (8) (13) (78)
Other income 11 15 11
Net operating income 822 769 879
Total operating expenses (536) (517) (618)
Net profit contribution3 286 252 261
Funds on platform4 ($Ab) 78.9 72.2 62.1
Australian loan portfolio5 ($Ab) 37.6 35.8 35.6
Legacy loan portfolio6 ($Ab) - 0.5 0.6
BFS deposits7 ($Ab) 46.4 44.5 42.2
Headcount 2,077 1,992 1,959
• Net interest and trading income of $A584m, up 17% on 1H17
– Increased average balances of the Australian loan and deposit portfolios: average
business lending up 11%, average Australian mortgages up 5% and average deposit
volumes up 11% on 1H17
– Improved lending and deposit margins
• Fee and commission income of $A234m, down 9% on 1H17
– Wealth management income up 6% due to increase in funds on the Wrap and Vision
platforms following the migrations of full service broking accounts and ANZ Oasis Wrap
superannuation and investment assets
– Decrease in Life insurance income following the sale of Macquarie Life’s risk insurance
business in Sep 16
• Net gain on disposal of businesses of $A1m down from $A192m in 1H17 which benefited
from the sale of Macquarie Life’s risk insurance business to Zurich Australia Limited, partially
offset by losses on the sale of US mortgages portfolio
• Impairments and provisions of $A8m, down on 1H17
– 1H17 impacted by the underperformance of certain equity positions, impairments of
intangibles relating to the Core Banking platform and higher business lending provisions on
a small number of loans
• Total operating expenses of $A536m, down 13% on 1H17 which was impacted by elevated
project activity and a change in approach to the capitalisation of software expenses in
relation to the Core Banking platform
Banking and Financial Services
Result
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
561. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group’s statutory P&L. 2. Includes investment and loan impairments. 3. Management accounting profit before unallocated corporate costs, profit share and
income tax.
1H18 $Am
2H17 $Am
1H17 $Am
Commodities1 435 627 505
Risk management products 285 427 321
Lending and financing 108 118 142
Inventory management, transport and storage 42 82 42
Credit, interest rates and foreign exchange1 283 352 269
Equities 186 146 161
Fee and commission income 436 410 447
Investment and other income 37 26 154
Impairments and provisions2 (56) (98) (51)
Net operating income 1,321 1,463 1,485
Brokerage, commission and trading-related expenses (190) (218) (205)
Other operating expenses (753) (764) (789)
Total operating expenses (943) (982) (994)
Non-controlling interests - - (1)
Net profit contribution3 378 481 490
Headcount 1,986 1,888 1,922
• Commodities income of $A435m, down 14% on 1H17
– Risk management products down 11% on 1H17 reflecting lower volatility resulting in
reduced client activity and trading opportunities
– Lending and financing down 24% on 1H17 largely due to a reduction in average loan
balances in the oil and gas sectors due to the wind down of residual Metals, Energy
Capital and other legacy portfolios
– Inventory management, transport and storage in line with 1H17
• Credit, interest rate and foreign exchange income of $A283m, up 5% on 1H17
– Strong contributions from foreign exchange and interest rates markets in Japan, EMEA,
and North America. Credit remains subdued
• Equities up 16% on 1H17 reflecting improvements in Asia following challenging conditions
in 1H17 and strong demand for structured client capital solutions
• Fee and commission income of $A436m broadly in line with 1H17
• Investment and other income down on a strong 1H17 which included gains on the sale of a
number of investments in energy and related sectors
• Impairments and provisions of $A56m, broadly in line with 1H17
• Total operating expenses of $A943m, down 5% on 1H17 reflecting reduced commodity-
related trading activity, reduced average headcount and associated activity, and realisation
of benefits from cost synergies following the merger of CFM and MSG
Commodities and Global Markets
Result
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
57
1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group’s statutory P&L. 2. Includes investment and loan impairments. 3. Internal revenue allocations are eliminated on consolidation in the Group’s statutory P&L.
4. Management accounting profit before unallocated corporate costs, profit share and income tax. 5. Prior period deal values and transaction numbers have been adjusted to reflect final transaction data. These changes are not material.
1H18 $Am
2H17 $Am
1H17 $Am
Fee and commission income 436 471 416
Principal Income (ex Non-controlling interests) 165 175 235
Investment and other income 222 183 224
Net interest and trading income1 (57) (8) 11
Impairments and provisions2 (20) (5) (92)
Internal management revenue3 1 (4) 10
Net operating income 582 637 569
Total operating expenses (390) (347) (375)
Non-controlling interests (2) (12) 11
Net profit contribution4 190 278 205
Capital markets activity5:
Number of transactions 152 216 212
Transactions value ($Ab) 73 97 65
Headcount 1,177 1,136 1,149
• Increased fee income:
– M&A: lower fee income in the US and Asia, partially offset by higher income in Australia
– ECM: reflects subdued conditions in Australia
– DCM: higher fee income in the US due to increased client activity
• Investment-related income (excluding non-controlling interests) down on 1H17:
– Lower gains on sale of investments
– Decreased net interest reflecting lower interest income from the debt investment portfolio
and higher funding costs for principal investments (including the acquisition of GIG)
– Partially offset by an increase in equity accounted income as a result of the improved
underlying performance of investments
• Lower impairment charges with 1H17 impacted by a small number of underperforming
principal investments
• Operating expenses increased, reflecting transaction, integration and ongoing costs
associated with the acquisition of GIG and higher operating expenses from increased
principal activity
Macquarie Capital
Result
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Additional information – FundingBAPPENDIX
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
59
• MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct funding,
capital and liquidity management arrangements
• MBL provides funding to the Macquarie Bank Group
• MGL provides funding predominately to the Non-Bank Group
Macquarie funding structure
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Non-Bank Group
Debt and Equity Debt and Equity
Equity
Macquarie Bank Limited
(MBL)
Bank Group
Debt and
Hybrid Equity
Debt and
Hybrid Equity
Non-Bank Subsidiaries
Macquarie Group Limited
(MGL)
60
• Macquarie’s statement of financial position is prepared based on generally accepted accounting principles which
do not represent actual funding requirements
• A funded balance sheet reconciliation has been prepared to reconcile the reported assets of Macquarie to the
assets that require funding
Sep 17
$Ab
Mar 17
$Ab
Sep 16
$Ab
Total assets per Statement of Financial Position 189.8 182.9 193.1
Accounting deductions:
Self funded trading assets (20.1) (14.6) (21.1)
Derivative revaluation accounting gross-ups (10.4) (10.7) (12.5)
Life investment contracts and other segregated assets (9.0) (9.6) (9.4)
Outstanding trade settlement balances (7.5) (6.6) (7.0)
Short-term working capital assets (6.2) (5.8) (7.0)
Non-controlling interests (1.4) (1.3) (0.1)
Less non-recourse funded assets:
Securitised assets and non-recourse funding (11.3) (13.5) (13.7)
Total assets per Funded Balance Sheet 123.9 120.8 122.3
For an explanation of the above deductions refer to slide 64.
Funded balance sheet reconciliation
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
611. Sep 17 includes ordinary capital and Macquarie Income Securities of $A0.4b. 2. Non-controlling interests have been netted in the funded balance sheet. 3. As at 30 Sep 17. 4. Includes drawn term funding facilities only.
Sep 17
$Ab
Mar 17
$Ab
Sep 16
$Ab
Funding sources
Certificates of deposits 0.8 0.9 0.5
Commercial paper 11.6 5.7 6.8
Net trade creditors 2.0 2.4 -
Structured notes 2.6 3.1 3.7
Secured funding 4.5 4.6 4.7
Bonds 27.5 29.3 34.6
Other loans 0.5 0.5 0.7
Syndicated loan facilities 3.9 4.8 4.9
Customer deposits 49.4 47.8 46.1
Loan capital 5.4 5.7 4.9
Equity and hybrids1,2 15.7 16.0 15.4
Total funding sources 123.9 120.8 122.3
Funded assets
Cash and liquid assets 24.6 21.7 20.4
Self-securitisation 16.7 16.5 15.4
Net trading assets 18.1 22.1 23.8
Loan assets including operating lease assets less than one year 13.8 13.9 14.9
Loan assets including operating lease assets greater than one year 39.6 37.1 37.9
Debt investment securities 1.7 2.3 2.7
Co-investment in Macquarie-managed funds and other
equity investments2 7.7 5.5 5.2
Property, plant & equipment and intangibles 1.7 1.7 1.6
Net trade debtors - - 0.4
Total funded assets 123.9 120.8 122.3
• Well diversified funding sources
• Minimal reliance on short-term wholesale funding markets
• Deposit base represents 40%3 of total funding sources
• Term funding beyond one year (excluding equity and securitisations)
has a weighted average term to maturity of 4.2 years3
Macquarie term funding maturing beyond one year
(includes equity and hybrid)4
Funding for Macquarie
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
$Ab
621. Includes ordinary capital and Macquarie Income Securities of $A0.4b. 2. As at 30 Sep 17. 3. Includes drawn term funding facilities only.
Sep 17
$Ab
Mar 17
$Ab
Sep 16
$Ab
Funding sources
Certificates of deposit 0.8 0.9 0.5
Commercial paper 11.6 5.7 6.8
Net trade creditors 1.2 1.6 0.5
Structured notes 2.1 2.6 3.3
Secured funding 4.0 4.4 4.6
Bonds 20.9 21.7 26.1
Other loans 0.4 0.3 0.4
Syndicated loan facilities 0.7 2.4 2.5
Customer deposits 49.4 47.8 46.1
Loan capital 4.2 4.6 3.8
Equity and hybrids1 12.6 12.6 12.5
Total funding sources 107.9 104.6 107.1
Funded assets
Cash and liquid assets 22.8 20.0 18.7
Self-securitisation 16.7 16.5 15.4
Net trading assets 17.4 21.8 23.3
Loan assets including operating lease assets less than one year 13.3 13.6 14.4
Loan assets including operating lease assets greater than one year 39.0 36.1 37.1
Debt investment securities 1.4 1.9 2.0
Non-Bank Group deposit with MBL (4.2) (6.7) (5.2)
Co-investment in Macquarie-managed funds and other
equity investments0.8 0.8 0.8
Property, plant & equipment and intangibles 0.7 0.6 0.6
Total funded assets 107.9 104.6 107.1
• Bank balance sheet remains liquid, well capitalised and with a diversity
of funding sources
• Term funding beyond one year (excluding equity and securitisations)
has a weighted average term to maturity of 4.2 years2
• Accessed term funding in markets including US, Europe and Australia
as well as opening new markets
Bank Group term funding maturing beyond one year
(includes equity and hybrid)3
Funding for the Bank Group
$Ab
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63
Sep 17
$Ab
Mar 17
$Ab
Sep 16
$Ab
Funding sources
Net trade creditors 0.8 0.8 -
Structured notes 0.5 0.5 0.4
Secured funding 0.5 0.2 0.1
Bonds 6.6 7.6 8.5
Other loans 0.1 0.2 0.3
Syndicated loan facilities 3.2 2.4 2.4
Loan capital1 1.2 1.1 1.1
Equity2 3.1 3.4 2.9
Total funding sources 16.0 16.2 15.7
Funded assets
Cash and liquid assets 1.8 1.7 1.7
Non-Bank Group deposit with MBL 4.2 6.7 5.2
Net trading assets 0.7 0.3 0.5
Loan assets less than one year 0.6 0.3 0.5
Loan assets greater than one year 0.5 1.0 0.8
Debt investment securities 0.3 0.4 0.7
Co-investment in Macquarie-managed funds and other
equity investments2 6.9 4.7 4.4
Property, plant & equipment and intangibles 1.0 1.1 1.0
Net trade debtors - - 0.9
Total funded assets 16.0 16.2 15.7
• Non-Bank Group is predominately term funded
• Term funding beyond one year (excluding equity) has a weighted
average term to maturity of 4.4 years3
Non-Bank Group term funding maturing beyond one year
(includes equity and hybrid)4
Funding for the Non-Bank Group
$Ab
1. Macquarie Group Capital Notes 1 & 2 of $A1.2b. 2. Non-controlling interests have been netted in the funded balance sheet. 3. As at 30 Sep 17. 4. Includes drawn term funding facilities only.
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64
• Self-funded trading assets: Macquarie enters into stock borrowing and lending as well as repurchase agreements and reverse repurchase
agreements in the normal course of trading activity that it conducts with its clients and counterparties. Also as part of its trading activities, Macquarie
pays and receives margin collateral on its outstanding derivative positions. These trading-related asset and liability positions are presented gross on
the statement of financial position but are viewed as being self funded to the extent that they offset one another and, therefore, are netted as part of
this adjustment.
• Derivative revaluation accounting gross-ups: Macquarie’s derivative activities are mostly client driven with client positions hedged by offsetting
positions with a variety of counterparties. The derivatives are largely matched and this adjustment reflects that the matched positions do not
require funding.
• Life investment contracts and other segregated assets: These represent the assets and liabilities that are recognised where Macquarie provides
products such as investment-linked policy contracts or where Macquarie holds segregated client monies. The policy (contract) liability and client
monies will be matched by assets held to the same amount and hence do not require funding.
• Outstanding trade settlement balances: At any particular time Macquarie will have outstanding trades to be settled as part of its brokering
business and trading activities. These amounts (payables) can be offset in terms of funding by amounts that Macquarie is owed on other
trades (receivables).
• Short-term working capital assets: As with the outstanding trade settlement balances above, Macquarie through its day-to-day operations
generates working capital assets (e.g. receivables and prepayments) and working capital liabilities (e.g. creditors and accruals) that produce a ‘net
balance’ that either requires or provides funding.
• Non-controlling interests: These represent the portion of equity ownership in subsidiaries not attributable to Macquarie. As this is not a position
that Macquarie is required to fund it is netted against the consolidated assets and liabilities in preparing the funded balance sheet. The netted amount
excludes Macquarie Income Securities which are included in Equity and hybrids in the funded balance sheet.
• Securitised and other non-recourse assets: These represent assets that are funded by third parties with no recourse to Macquarie including
lending assets (mortgages and leasing) sold down into external securitisation entities.
Explanation of Funded Balance Sheetreconciling items
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65
Liquidity Policy
• The key requirement of MGL and MBL’s liquidity policies is that the entities are able to meet all liquidity obligations during
a period of liquidity stress:
– A minimum 12 month period with constrained access to funding markets and with only a limited impact on
franchise businesses
• Term assets are funded by term funding, stable deposits and equity
Liquidity Framework
• A robust liquidity risk management framework ensures that both MGL and MBL are able to meet their funding requirements
as they fall due under a range of market conditions. Key tools include:
– Liability driven approach to balance sheet management
– Scenario analysis
– Maintenance of unencumbered liquid asset holdings
• Liquidity management is performed centrally by Group Treasury, with oversight from the Asset and Liability Committee and
the Risk Management Group
• The Boards of each entity approve their respective liquidity policy and are provided with liquidity reporting on a monthly basis
Conservative long standing liquidity risk management framework
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
MACQUARIE 2017
Additional information – CapitalCAPPENDIX
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67
Surplus calculation
30 Sep 17
Harmonised
Basel III
$Am
APRA
Basel III
$Am
Macquarie eligible capital:
Bank Group Gross Tier 1 capital 13,845 13,845
Non-Bank Group eligible capital 4,303 4,303
Eligible capital 18,148 18,148 (a)
Macquarie capital requirement:
Bank Group capital requirement
Risk-Weighted Assets (RWA)1 86,886 88,880
Capital required to cover RWA2 7,385 7,555
Tier 1 deductions 549 2,327
Total Bank Group capital requirement 7,934 9,882
Total Non-Bank Group capital requirement 4,038 4,038
Total Macquarie capital requirement (at 8.5%2 of the Bank Group RWA) 11,972 13,920 (b)
Macquarie regulatory capital surplus (at 8.5%2 of the Bank Group RWA) 6,176 4,228 (a)-(b)
Macquarie Basel III regulatory capital
1. In calculating the Bank Group’s contribution to Macquarie’s capital requirement, $A745m RWA associated with exposures to the Non-Bank Group are eliminated. 2. Calculated at 8.5% RWA including capital conservation buffer (CCB), per APRA ADI Prudential Standard 110.
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68
Bank Group contribution
Macquarie APRA Basel III regulatory capital
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
30 Sep 17
Risk-weighted assets
$Am
Tier 1 Deductions
$Am
Capital Requirement1
$Am
Credit risk
On balance sheet 58,840 5,001
Off balance sheet 16,701 1,420
Credit risk total2 75,541 6,421
Market risk 3,314 282
Operational risk 10,025 852
Interest rate risk in the banking book - -
Tier 1 deductions 2,327 2,327
Contribution to Group capital calculation2 88,880 2,327 9,882
1. Calculated at 8.5% RWA including capital conservation buffer (CCB), per APRA ADI Prudential Standard 110. 2. In calculating the Bank Group’s contribution to Macquarie’s capital requirement, $A745m RWA associated with exposures to the Non-Bank Group are eliminated.
69
Macquarie regulatory capital
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
• APRA has specified a regulatory capital framework for Macquarie
• A dollar capital surplus is produced; no capital ratio calculation is specified
• APRA has approved Macquarie’s Economic Capital Adequacy Model (ECAM) for use in calculating the regulatory capital requirement
of the Non-Bank Group
• Any significant changes to the ECAM must be approved by the MGL Board and notified to APRA within 14 days
• The ECAM is based on similar principles and models as the Basel III regulatory capital framework for Banks, with both calculating
capital at a one year 99.9% confidence level:
Risk1 Basel III ECAM
Credit Capital requirement generally determined by Basel III IRB
formula, with some parameters specified by the regulator (e.g.
loss given default)
Capital requirement generally determined by Basel III IRB
formula, but with internal estimates of key parameters
Equity Harmonised Basel III: 250%, 300% or 400% risk weight,
depending on the type of investment2. Deduction from Common
Equity Tier 1 above a threshold
APRA Basel III: 100% Common Equity Tier 1 deduction
Extension of Basel III credit model to cover equity exposures.
Capital requirement between 36% and 82% of face value;
average 47%
Market 3 times 10 day 99% Value at Risk (VaR) plus 3 times 10-day 99%
Stressed VaR plus a specific risk charge
Scenario-based approach
Operational Advanced Measurement Approach Advanced Measurement Approach
1. The ECAM also covers insurance underwriting risk, non-traded interest rate risk and the risk on assets held as part of business operations, including: fixed assets, goodwill, intangible assets and capitalised expenses. 2. Includes all Banking Book equity investments, plus net long
Trading Book holdings in financial institutions.
Non-Bank Group contribution
70
Macquarie regulatory capital
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Non-Bank Group contribution
1. Includes leases. 2. Capital associated with net trading assets (including market risk capital) and net trade debtors has been included here.
30 Sep 17Assets
$Ab
Capital Requirement
$AmEquivalent
Risk Weight
Funded assets
Cash and liquid assets 1.8 22 15%
Loan assets1 1.1 117 132%
Debt investment securities 0.3 85 356%
Co-investment in Macquarie-managed funds and other equity investments 6.6 2,715 518%
Co-investment in Macquarie-managed funds and other equity investments (relating to investments that hedge DPS plan liabilities) 0.3
Property, plant & equipment and intangibles 1.0 275 344%
Non-Bank Group deposit with MBL 4.2
Net trading assets 0.7
Total funded assets 16.0 3,214
Self-funded and non-recourse assets
Self funded trading assets 0.3
Outstanding trade settlement balances 3.2
Derivative revaluation accounting gross ups 0.0
Short-term working capital assets 3.8
Non-controlling interests 1.4
Total self-funded and non-recourse assets 8.7
Total Non-Bank Group assets 24.7
Off balance sheet exposures, operational, market and other risks, and diversification offset2 824
Non-Bank Group capital requirement 4,038
MACQUARIE 2017
GlossaryCAPPENDIX
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72
Glossary
$A / AUD Australian Dollar
$C / CAD Canadian Dollar
$US / USD United States Dollar
£ / GBP Pound Sterling
¥ / JPY Japanese Yen
€ Euro
1H17 Half-Year ended 30 September 2016
1H18 Half-Year ended 30 September 2017
2H16 Half-Year ended 31 March 2016
2H17 Half-Year ended 31 March 2017
ABN Australian Business Number
ADI Authorised Deposit-Taking Institution
AML Anti-Money Laundering
ANZ Australia and New Zealand
Approx. Approximately
APRA Australian Prudential Regulation Authority
APTT Asian Pay Television Trust
ASX Australian Stock Exchange
AUM Assets under Management
AVS Available For Sale
BCBS Basel Committee on Banking Supervision
BFS Banking and Financial Services
CAF Corporate and Asset Finance
Capex Capital Expenditure
CCB Capital Conservation Buffer
CCP Central Counterparty
CET1 Common Equity Tier 1
CFM Commodities and Financial Markets
CGM Commodities and Global Markets
CHF Swiss Franc
CLF Committed Liquid Facility
CMA Cash Management Account
CMBS Commercial Mortgage-Backed Securities
CRM Customer Relationship Management
CY16 Calendar Year ended 31 December 2016
CY17 Calendar Year ending 31 December 2017
DCM Debt Capital Markets
DPS Dividends Per Share
DRP Dividend Reinvestment Plan
DTA Deferred Tax Asset
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73
Glossary
ECAM Economic Capital Adequacy Model
ECM Equity Capital Markets
ECS Exchangeable Capital Securities
EMEA Europe, the Middle East and Africa
EPS Earnings Per Share
EUM Equity Under Management
FSI Financial System Inquiry
FMG Financial Management Group
FX Foreign Exchange
FY07 Full Year ended 31 March 2007
FY08 Full Year ended 31 March 2008
FY09 Full Year ended 31 March 2009
FY11 Full Year ended 31 March 2011
FY13 Full Year ended 31 March 2013
FY14 Full Year ended 31 March 2014
FY15 Full Year ended 31 March 2015
FY16 Full Year ended 31 March 2016
FY17 Full Year ended 31 March 2017
FY18 Full Year ending 31 March 2018
GIGGreen Investment Group (rebranded from Green
Investment Bank)
HK Hong Kong Dollar
HQLA Highly Quality Liquid Assets
IPO Initial Public Offering
IRB Internal Ratings-Based
IT Information Technology
JV Joint Venture
LBO Leveraged Buyout
LCR Liquidity Coverage Ratio
LNG Liquefied Natural Gas
LP Limited Partner
Ltd Limited
M&A Mergers and Acquisitions
MacCap Macquarie Capital
MACS Macquarie Additional Capital Securities
MAM Macquarie Asset Management
MBL Macquarie Bank Limited
MD&A Management Discussion & Analysis
MEC Metals and Energy Capital
MEIF1 Macquarie European Infrastructure Fund 1
MEIF3 Macquarie European Infrastructure Fund 3
MEREP Macquarie Group Employee Retained Equity Plan
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74
Glossary
MGL / MQG Macquarie Group Limited
MIC Macquarie Infrastructure Corporation
MIDIS Macquarie Infrastructure Debt Investment Solutions
MIM Macquarie Investment Management
MIRA Macquarie Infrastructure and Real Assets
MKIF Macquarie Korea Infrastructure Fund
MPW Macquarie Private Wealth
MQA Macquarie Atlas Roads
MSG Macquarie Securities Group
MSIS Macquarie Specialised Investment Solutions
MW Mega Watt
NGLs Natural gas liquids
NIM Net Interest Margin
No. Number
NPAT Net Profit After Tax
NPC Net Profit Contribution
NSFR Net Stable Funding Ratio
OTC Over-The-Counter
P&L Profit and Loss Statement
PCP Prior Corresponding Period
PPE Property, Plant and Equipment
PPP Public Private Partnership
RBA Reserve Bank of Australia
REIT Real Estate Investment Trust
RMG Risk Management Group
ROE Return on Equity
RWA Risk Weighted Assets
SBI State Bank of India
SGX Singapore Exchange
SME Small and Medium Enterprise
SMSF Self Managed Super Fund
TMET Telecommunications, Media, Entertainment and Technology
UK United Kingdom
US United States of America
VaR Value at Risk
VWAP Volume Weighted Average Price
yr Year
Macquarie 1H18 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices
Presentation to investors and analysts
27 October 2017
Result announcement for the half-year ended 30 September 2017