17 May 2005
Macquarie Bank today announced a $823 million after tax profit attributable to ordinary equity holders for the full year to 31 March 2005, a 67 per cent increase on the prior year. Pre-tax profit increased by 69 per cent to $1,103 million over the same period.
Excluding the profit brought to account on the formation of the Macquarie Goodman Group (MGQ), the full year after tax profit for the Bank increased 48 per cent to $732 million, and pre-tax profit was up 49 per cent to $973 million over the same period. Earnings per share increased to $3.75 from $2.33, a 61 per cent increase.
Macquarie Bank Chairman David Clarke said the Bank had declared a special dividend of 40 cents per share in addition to a final dividend of $1.00 per share, up from 70 cents last year, taking total dividends for the year to 31 March 2005, to $2.01 per share as compared to last year's dividends of $1.22 per share. The special dividend was declared because of the significant one off profit recognised from the formation of the Macquarie Goodman Group, reflecting 12 years of business building by the property funds management team. Both the final and special dividend are franked to 90 per cent.
“We are pleased to report another record result for our shareholders. The net profit is an increase on the previous year of two thirds, more than three times the profit of three years ago, and more than twelve times the profit of twelve years ago.
“The year was characterised by substantial international growth. The continuation of business expansion and significant international achievements resulted in international income growth of 83 per cent to $1.3 billion. The Bank also benefited from a 29 per cent increase in employee numbers outside Australia to 1,750, with total staff numbers increasing by 15 per cent to 6,560,” Mr Clarke said.
Mr Clarke noted that Macquarie Bank's total shareholder return since listing in July 1996 until 31 March 2005 was 929 per cent. This return compares to the average total shareholder return over the same period of 164 per cent for the companies which comprised the ASX top 50 at the time of the Bank's listing, assuming reinvestment of all dividends and accounting for all corporate actions.
Assets under management grew 42 per cent to $89 billion over the period. Specialist property and infrastructure funds increased from $26 billion to $46 billion over the same period.
“The specialist funds continued to provide strong returns to investors. TSR for investors in Macquarie specialist funds both in Australia and internationally was over 400 per cent from December 1995 to 31 March 2005,” Mr Clarke said.
Macquarie Bank Managing Director and Chief Executive Officer, Mr Allan Moss, said all Groups made record contributions to the result. The Investment Banking Group reported an excellent result in a strong environment, up 73 per cent on pcp. The Banking and Property Group made an excellent contribution, up 200 per cent on pcp (24 per cent excluding the profit brought to account on the formation of MGQ). The Treasury and Commodities Group recorded a strong result, up 30 per cent on a strong pcp. Equity Markets Group had a good result, slightly ahead of pcp, while the Financial Services Group posted a good result also, 20 per cent up on pcp. The Funds Management Group was 66 per cent up on pcp, including the profit on the sale of its Malaysian joint venture.
Mr Moss said international income represented approximately 37 per cent of total income. “International income is now half, or more than half the income from a number of business groups,” he said.
Mr Moss highlighted a number of notable achievements around the world for the year to 31 March 2005.
Europe, Africa and the Middle East
Australia and New Zealand
Financial Results and Capital Management
Macquarie Bank Chief Financial Officer, Mr Greg Ward, said the Bank has maintained its strong capitalisation, with a Tier 1 capital ratio of 14.4 per cent, providing the ability to support new and existing business initiatives and maintain its credit ratings.
“In response to demand from US-based investors, Macquarie Bank will launch a Level 1 American Depository Receipt (ADR) program, enabling US investors to purchase Macquarie Bank ordinary shares in US dollars over the counter. This will provide shareholders in this region with an alternative means of gaining exposure to the Bank,” Mr Ward said.
Total income from ordinary activities for the year was $3,655 million, up 54 per cent from $2,380 million for the prior year while international income rose 83 per cent to $1,273 million from $696 million for the same period. Net fee and commission income rose by 45 per cent to $1,907 million, while the contribution from trading income rose by 30 per cent to $730 million from $562 million in the previous year. Net interest income rose by 33 per cent to $405 million, from $304 million previously. Other income increased significantly to $613 million from $196 million for the prior year.
The special dividend takes the dividend payout ratio for the year to 54 per cent. The Bank's target payout ratio each year remains in the range of 50 to 60 per cent of net earnings, It is expected that future dividends will be at least 80 per cent franked.
Mr Moss said: “The Bank is aiming to repeat the full year 2005 result for the year ending 31 March 2006, excluding the one off profit realisation on the formation of MGQ and the impact of the introduction of International Financial Reporting Standards.
“Achieving that result will, however, be subject to swing factors including the quantum of performance fees on specialist funds, market conditions and asset realisations.
“We note that equity markets conditions have recently softened and we may not achieve this outcome if this softening is sustained.”
Mr Moss added that over the medium term the Bank continues to be well placed due to good businesses, diversification, benefits of major strategic growth initiatives, committed quality staff and effective prudential controls. Subject to market conditions not deteriorating materially, the Bank expects continued good growth over time in revenue and earnings across most businesses and continued good growth in international businesses.
For further information, please contact:
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532