Macquarie Group Q3 2025 Trading Update
Macquarie Group Limited (Macquarie) (ASX: MQG; ADR: MQBKY) has released its business activity update for the third quarter of the financial year ending 31 March 2025 (3Q25). The announcement was made by Macquarie Group Managing Director and Chief Executive Officer, Shemara Wikramanayake, who stated that the group’s operating performance for the year-to-date (FY25 YTD) remained largely in line with the corresponding period in the previous financial year.
Performance Overview
Annuity-Style Businesses Show Strong Growth
Macquarie’s annuity-style businesses delivered a significantly higher net profit contribution in 3Q25 compared to the same quarter in 3Q24. The FY25 YTD net profit contribution also saw a substantial increase over FY24 YTD, primarily driven by improved performance fees and higher investment income within Macquarie Asset Management (MAM). Additionally, the Banking and Financial Services (BFS) division benefited from continued volume growth and lower operating expenses. However, these positive factors were partially offset by margin compression, which affected overall profitability.
Markets-Facing Businesses Experience Decline
Conversely, the markets-facing businesses posted a considerably lower net profit contribution in 3Q25 compared to 3Q24. The FY25 YTD net profit contribution also saw a significant decline when compared to the same period in the previous financial year. This downturn was primarily attributed to challenging conditions in certain commodity markets, particularly within the Commodities and Global Markets (CGM) division.
Strong Financial Position Despite Decline in Capital Surplus
Macquarie Group continues to maintain a robust financial position, comfortably exceeding the Australian Prudential Regulation Authority (APRA) Basel III regulatory requirements. As of 31 December 2024, the group’s capital surplus stood at $A8.5 billion, reflecting a decrease from $A9.8 billion at 30 September 2024. The Bank Group’s APRA Basel III Level 2 Common Equity Tier 1 (CET1) capital ratio was reported at 12.6%, down from 12.8% at the end of the previous quarter. On a harmonized basis, the CET1 capital ratio stood at 17.7%.
Other key regulatory metrics as of 31 December 2024 included:
- APRA leverage ratio: 5.0% (Harmonized: 5.7%)
- Liquidity Coverage Ratio (LCR): 196%
- Net Stable Funding Ratio (NSFR): 113%
Key Highlights from Business Divisions
Ms. Wikramanayake provided insights into the operational activities of each division during 3Q25.
Macquarie Asset Management (MAM)
MAM reported assets under management (AUM) of $A942.7 billion as of 31 December 2024, marking a 3% increase from $A914.3 billion at 30 September 2024. Growth in Public Investments AUM played a crucial role, increasing by 5% to $A571.0 billion, largely due to favorable foreign exchange movements.
In Private Markets, AUM stood at $A371.7 billion, reflecting divestments offset by positive foreign exchange impacts and higher net asset valuations. At the end of the quarter, Macquarie’s Private Markets segment managed $A212.9 billion in equity, with $A27.4 billion available for deployment. During 3Q25, Macquarie raised $A3.8 billion in new equity, invested $A7.3 billion, and completed divestments worth $A12.7 billion.
Banking and Financial Services (BFS)
The BFS division recorded total deposits of $A163.8 billion as of 31 December 2024, reflecting a 7% increase from $A153.0 billion at 30 September 2024. The home loan portfolio grew by 5%, reaching $A136.2 billion. Funds on platform stood at $A152.4 billion, maintaining Macquarie’s strong presence in wealth management services.
However, the business banking loan portfolio declined by 1% during 3Q25, amounting to $A16.5 billion. Despite this minor contraction, the division’s overall growth remained positive due to its strong performance in deposits and home loans.
Commodities and Global Markets (CGM)
CGM experienced a decline in net profit contribution compared to the same period in the previous year. This was largely attributed to weaker conditions in certain commodity markets and unfavorable timing impacts on income recognition for North American Gas and Power contracts.
Nevertheless, CGM witnessed increased contributions from Financial Markets, with heightened activity from corporate and private equity clients in risk management and financing. Growth was particularly evident in foreign exchange, fixed income, and credit transactions. Furthermore, Asset Finance improved due to portfolio expansion in Shipping Finance, Technology, and Resources.
Macquarie Capital
Macquarie Capital saw an increase in fee and commission income in 3Q25 compared to the previous quarter and the weaker corresponding period in 3Q24. This growth was primarily driven by higher mergers and acquisitions (M&A) advisory fees.
However, investment-related income decreased due to the timing of gains on investments. Despite this, Macquarie Capital maintained its position as a leader in private credit markets, with its portfolio exceeding $A25 billion. During 3Q25, the division deployed more than $A3.2 billion, focusing on investment opportunities in credit markets and customized financing solutions.
Macquarie Group’s 3Q25 performance reflects a balanced mix of growth and challenges across its business divisions. While the annuity-style businesses showed strong profitability driven by higher performance fees and investment income, the markets-facing businesses faced declines due to subdued commodity market conditions.
With a robust financial position, Macquarie remains well-capitalized to navigate economic fluctuations and capitalize on emerging opportunities. As the group progresses through the final quarter of FY25, its focus on prudent financial management and strategic expansion will be key factors in shaping its performance for the rest of the year.
