Macquarie reports 21% mortgage book growth

Macquarie Group has released its half-year results for the 2020 financial year (1H20), reporting a group net profit after tax of $1.4 billion, up 11 per cent on 1H19.

The group’s net operating income rose by 8 per cent to $6.3 billion, offset by a 9 per cent increase in its net operating expenses, which rose to $4.4 billion.

Macquarie’s performance was helped by a 2 per cent increase in the net profit contribution of its banking and financial services (BFS) division, contributing $385 million to the group’s profit.

The BFS division was bolstered by 21 per cent growth in the bank’s Australian mortgage portfolio, which grew from $36.1 billion in 1H19 to $43.6 billion.

According to Macquarie, its mortgage growth was driven by “strong demand” in lower loan-to-value ratio (LVR) and owner-occupier lending channels.

Macquarie has also continued to gain popularity in the broker space, as revealed in the Australian Finance Group’s (AFG) mortgage and competition index for the September quarter, which is based off data collected by the aggregator’s network of 3,000 brokers.

According to the index, Macquarie’s share of the broker space increased from 9.7 per cent as at 30 June to 11.4 per cent in the three months to 30 September.

The bank’s broker market share has more than doubled over the 12 months to 30 September, from 4.6 per cent, and is ranked second overall (when excluding subsidiaries), behind only the Commonwealth Bank.

Following the release of the group’s 1H20 results, Macquarie Group managing director and CEO Shemara Wikramanayake said she was pleased with the group’s overall result.

“Our first half result highlights the benefits of the business and geographic diversity of the group, with increased client activity across many of our business lines and favourable market conditions across the commodities and global markets platform in particular,” she said.

Ms Wikramanayake said she is confident the group will deliver a positive result in FY20, despite Macquarie acknowledging that it expects the FY20 result to be slightly down on FY19.

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

[Related: ANZ still grappling with ‘nuanced’ lending environment]