Macquarie grows mortgage book by a third

Macquarie Group has posted its 2022 financial year results (for the 12 months to March), revealing a net profit of $4.7 billion, up 56 per cent on the previous year.

Growth in home and business loans drove total loan assets across the group to rise to $134.7 billion, up by 28 per cent year-on-year.

Under the banking and financial services division, the home loan portfolio came to a total of $89.9 billion, 34 per cent higher than a year prior.

Brokers had accounted for around 90 per cent of the company’s mortgages.

Loans under the business bank came to $11.8 billion, up by 12 per cent, while car loans had copped a 23 per cent hit, down to $8.7 billion.

Higher lending and transaction volumes saw banking and lending fee income come to $153 million for the year to March, up by 6 per cent year-on-year.

The loan growth helped the banking and financial services business contribute $1 billion in net profit, 30 per cent more than in FY21.

As Macquarie Group managing director and chief executive Shemara Wikramanayake explained, she expects the growth in loans across the mortgage and business banking segments to continue, as the team has focused on its digital offering.

But the group has remained cautious in its outlook, outlining a number of headwinds, such as market volatility, global inflation and climbing interest rates.

“We expect that market dynamics will continue to drive margin pressure and I think others, our peers have noted that as well,” Ms Wikramanayake told investors.

“And in addition to that, we expect an ongoing increase in expenses to support volume growth and part of that is in response to regulatory requirements, but also technology investment, where we continue to have to upgrade our offering, in terms of the services we’re delivering to our customers.”

Changes on the board

As part of Macquarie’s ongoing remediation plan it has been working with APRA on, the group has been making changes to its governance and risk culture.

As a result, three bank-only non-executive directors (BONDs) are proposed to be added to the Macquarie Bank board.

Former CBA group executive and Challenger funds management CEO Ian Saines will be the first BOND on the Macquarie Bank board. Currently, he is a non-executive director with NSW Treasury Corporation.

Macquarie has flagged that it will declare more BOND appointments in due course.

“Consistent with similar structures in other markets where a banking entity sits within a broader group structure, this change introduces additional safeguards to better protect the interests of [Macquarie Bank] within the group,” the company stated.

“After these appointments, the [Macquarie Bank] board will comprise the [group] non-executive directors, Shemara Wikramanayake, Stuart Green and the three BONDs with all [bank] board committees benefiting from BONDs representation.”

Michael Coleman, board director of Macquarie Group and the bank is set to resign after 10 years on both boards at Macquarie annual meeting later this year.

The boards have already welcomed a new member, Michelle Hinchliffe, who has replaced Mr Coleman as chair of the board’s audit committee.

Peter Warne, chair for Macquarie Group and the bank boards has stepped down and will be replaced by former Reserve Bank of Australia governor Glenn Stevens.

Mr Stevens had also been chair of the Australian Council of Financial Regulators between 2006 to 2016 as well as a member of G20 committees.

Currently, he is a board member of NSW Treasury Corporation.

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