Macquarie strengthens mortgage portfolio in 1Q

Macquarie Group has released its first quarter results for the 2020 financial year (1Q20), reporting mortgage portfolio growth of 3 per cent in the three months to 30 June 2019, up $1.2 billion from $38.5 billion in the previous quarter to $39.7 billion.

When compared to 1Q19, Macquarie’s portfolio has grown 15.7 per cent, up $5.4 billion from $34.3 billion.

The quarterly increase in Macquarie Bank’s portfolio coincided with sharp rise in its share of the broker space.

According to the Australian Finance Group’s (AFG) latest index – which is based off data collected from the aggregator’s network of 3,000 brokers – Macquarie’s share of home loans lodged in the third-party space doubled in the three months to 30 June 2019, rising from 4.9 per cent to 9.7 per cent.

As at 30 June, Macquarie – which relies almost solely on the broker channel to distribute its home loan products – ranked second overall in terms of its share of the third-party space, behind only the Commonwealth Bank.

Further, Macquarie’s 1Q20 results revealed that its business banking loan portfolio increased by 1 per cent over the three months to 30 June 2019, rising to $8.3 billion, while its Australian vehicle finance portfolio slipped 1 per cent to $15 billion.

Macquarie’s total funds on platform increased 3 per cent over the quarter, rising to $88.8 billion.

The net profit contribution of Macquarie Group’s Banking and Financial Services (BFS) division remained stable at 12 per cent but rose 1 per cent when compared to 1Q19.

However, according to Macquarie Group CEO Shemara Wikramanayake, profits are expected to be “slightly down” on FY19, in which the group reported a total net profit after tax of just under $3 billion.

Ms Wikramanayake said that the group’s short-term outlook remains subject to:

• the completion of transactions
• market conditions
• the impact of foreign exchange
• potential regulatory changes and tax uncertainties
• geographic composition of income

She concluded: “Macquarie remains well positioned to deliver superior performance in the medium term” due to its deep expertise in major markets, strength in diversity and ability to adapt its portfolio mix to changing market conditions, ongoing program to identify cost-saving initiatives and efficiency, strong balance sheet and proven risk management framework and culture.”

[Related: APRA calls out banks for ‘improper reporting’]