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Macquarie’s home loan portfolio jumps 21% in FY23

Home loans now make up 35 per cent of the lender’s asset portfolio, with growth driven by lower loan-to-value and owner-occupier lending.

Macquarie Group (ASX: MQG) announced its full-year results ended 31 March 2023 (FY23), revealing that its home loan portfolio lifted to $108.1 billion, which was up 21 per cent on March 2022.

Home loans make up 35 per cent of the lender’s asset portfolio, up from 31 per cent in the previous year. 

The bank’s home loan growth was driven by lower loan-to-value (LVR) and owner-occupier lending.

The average LVR at origination was 65 per cent in the period ended September 2022, the bank outlined, with the same proportion of its mortgage book being for owner-occupiers.

Business lending portfolio increased by 13 per cent, up $184 million to $13 billion, driven by an increase in client acquisitions.

However, mortgage and business lending growth was partially offset by a run-off in car loans that dropped to $6.1 billion from $8.8 billion the year before.

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Overall, its Banking and Financial Services (BFS) delivered a net profit contribution of $1.2 billion, up 20 per cent from $1.00 billion in FY22, while asset finance lifted 3 per cent to $6.2 billion.

Broker commissions and fees accounted for $1.03 billion, slightly down from $1.03 billion in March 2022 financial year.
Its total deposits came in at $129.4 billion, marking a 32 per cent increase on March 2022 results.

Macquarie also reported a net profit after tax of $5.1 billion, up 10 per cent on the year prior.

The bank’s profit for the three quarters to December was also up slightly, driven by heightened volatility in commodity and interest rate markets.

However, Macquarie’s capital markets fee income was lower due to weaker market activity and its mergers and acquisitions fee income was down from a strong prior year.

Despite a range of factors that may influence its short-term outlook, including market conditions, global economic conditions, inflation and interest rates, significant volatility events, and the impact of geopolitical events, Macquarie remains optimistic about its future prospects.

Chief executive Shemara Wikramanayake said while the uncertain macro-economic backdrop and expectations of slowing interest rate increases had clouded the outlook for deals, the extreme weather in the US and the war in Ukraine meant the group’s commodity unit had continued to outperform.

“We continue to maintain a cautious stance, with a conservative approach to capital, funding and liquidity that positions us well to respond to the current environment, Ms Wikramanayake said.

“Macquarie remains well-positioned to deliver superior performance in the medium term due to its diverse business mix across annuity-style and markets-facing businesses.”

The bank also noted that total customer deposits increased to $134.5 billion at 31 March 2023, up from $101.5 billion at 31 March 2022, and term funding of $23.3 billion was raised during FY23.

Macquarie appoints new board member

Meanwhile, Macquarie Group also announced the appointment of Susan Lloyd-Hurwitz as a new board member, subject to necessary approvals.

She will join the Macquarie Group Ltd (MGL) board, effective from 1 June 2023 as well as the Macquarie Bank Limited (MBL) board, effective 28 July 2023.

With over 30 years of global experience in the investment and real estate sector, Ms Lloyd-Hurwitz brings significant expertise to the boards, having most recently served as CEO and managing director of Mirvac for more than a decade.

In addition, Nicola Wakefield Evans, Macquarie’s longest-serving current director, has confirmed that she will seek re-election as an independent director to the MGL board at the 2023 AGM.

Her remaining tenure is expected to conclude in 2024 and her re-election will provide continuity for the board.

[Related: Macquarie loan book lifted 4% in 3Q23]

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