Macquarie bucks trend with 18% mortgage growth

Macquarie Group has released its full-year results for the 2019 financial year (FY19), reporting that its banking and financial services (BFS) division recorded mortgage growth, with its portfolio rising from $32.7 billion to $38.6 billion.  

The rate of growth in Macquarie’s book exceeded the previous corresponding period (14 per cent), bucking a general market trend of weakening or flat home lending growth reported by other lenders, including ANZ and NAB.

Speaking to Mortgage Business following the release of the group’s results, Macquarie Group CEO Shemara Wikramanayake said that the bank has reaped the benefits of a bespoke home lending strategy while maintaining tighter credit practices.  

“We really focus on our offering to customers,” she said.

“Our credit standards remain right, and if anything, we’ve been improving the loan-to-value ratios in our book, but it’s really through engagement with our customers, understanding their needs, and being there to be responsive to them that we have managed to grow our book.”

Ms Wikramanayake added: “I think being small and nimble, we’re able to provide a very tailored and valuable offering to our customers and grow our business that way.”

Macquarie’s BFS division reported a net profit of $756 million, up 3 per cent on FY18, driven by mortgage growth and business lending growth (up 12.6 per cent to $8.7 billion) – partially offset by a contraction in its vehicle finance business, with its book dropping from $11.6 billion to $11.5 billion.

The net profit contribution of Macquarie’s BFS to the group’s performance also improved in FY19, rising from 11 per cent to 12 per cent.

In total, Macquarie Group posted a net profit of $3 billion, up 17 per cent from $2.5 billion in FY18, which the CEO largely attributed to growth in Macquarie’s markets-facing businesses and commodities business.  

Reflecting on the overall performance, Ms Wikramanayake said: “Macquarie remains well positioned to deliver superior performance in the medium term due to our deep expertise in major markets, strength in diversity and ability to adapt the portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives, a strong and conservative balance sheet and a proven risk management framework and culture.

“Macquarie’s 50th anniversary provides an opportunity to reflect on the group’s long-term success, which has always been based on the expertise and integrity of our people, working in-market to identify untapped opportunities and be accountable for delivering positive outcomes for our clients and the local community.”

Managerial changes

Macquarie has also announced changes to its managerial team, following the resignation of group head of Macquarie Capital, Tim Bishop, effective 31 May.

Mr Bishop has been with Macquarie for 20 years, serving on the executive committee for nine years and head of Macquarie Capital for seven years.

Effective 1 June 2019, Daniel Wong, currently global co-head of the infrastructure and energy group based in London, and Michael Silverton, currently head of the Americas, Europe and Asia group based in New York, will become group co-heads of Macquarie Capital and join the executive committee.

Mr Wong and Mr Silverton have held roles with Macquarie for 20 years, the majority of which involved developing Macquarie Capital business in international markets.

[Related: NAB profits up despite $525m remediation hit]