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Macquarie Group operational update broadly credit neutral

Macquarie Group provided guidance that the 2016 net profit would be in excess of the $1.6 billion reported in FY 2015. The more stable annuity-style business continues to grow with $345 billion under management and is the single largest contributor to profit. The major drag on FY16 results is expected to come from the commodities and financial markets division due to ongoing market volatility stemming from the energy and resources sector. How Macquarie will eventually fare will not be known until the full year FY16 results to be presented on 6th May 2016.

 

Macquarie Group is continuing to work through the additional regulatory requirements that APRA issued for Conglomerates as well as responding to the Financial System Inquiry recommendations released on 20 October 2015. Increasing compliance costs will continue to weigh on Macquarie group as well as for the rest of the industry.

 

The Macquarie Bank Group APRA Basel III CET1 capital ratio at 9.9% remains above the required regulatory ratio of 8.5%, with their Tier 1 ratio at 11.0% and leverage ratio at 5.2%.