By Alice Uribe


SYDNEY--Macquarie Group reported a 32% fall in annual profit and cut its dividend by 14%, with both of its main operating units recording a lower net profit contribution compared to the prior year amid continued uncertainty in global economies.

Macquarie, Australia's biggest investment bank and asset manager, said its net profit fell to 3.52 billion Australian dollars (US$2.31 billion) in the 12 months through March, from A$5.18 billion the previous year - a record.

Consensus forecasts compiled by FactSet projected Macquarie's full-year net profit for the 2024 fiscal year would be A$3.54 billion.

"Despite ongoing economic uncertainty and subdued market conditions in many parts of the world, Macquarie's client franchises remained resilient over the last year, with continued client growth, fundraising and new business origination," said Chief Executive Shemara Wikramanayake.

Full year revenue was A$16.89 billion, a 12% fall from the previous year.

Macquarie declared a final dividend of A$3.85 per share, compared to a final dividend of A$4.50 last year.

Macquarie, which has a reputation among analysts for conservative forecasts, didn't provide specific guidance, but Wikramanayake said the company "remains well-positioned to deliver superior performance in the medium term," in part due to its diverse business mix.

The company's annuity-style activities, which are undertaken by Macquarie Asset Management, its banking and financial services unit and certain businesses in the commodities and global markets unit, generated a combined net profit contribution of A$3.01 billion, down 27% on year.

The decline was mainly due to lower asset realizations in green investments and continued investment in the development of green energy portfolio companies in Macquarie Asset Management, said Macquarie.

Its markets-facing activities, which are undertaken by Macquarie Capital and most businesses in the commodities and global markets unit, delivered a combined net profit contribution of A$3.70 billion, down 40% compared the prior year. Macquarie said fiscal 2023 was "notably characterized by exceptional levels of volatility in commodity markets" that drove a record fiscal 2023 performance from commodities and global markets.

That unit delivered a fiscal 2024 net profit contribution of A$3.21 billion, down 47% from the previous year. The decline in fiscal 2024 can be partly attributed to substantially lower inventory management and trading income from a strong prior year in North American gas and power, said Macquarie.

For the full year, Macquarie's net operating income was A$16.89 billion, down 12% on year, while operating expenses of A$12.06 billion were broadly in line with the previous year. International income accounted for 66% of Macquarie's total income, compared with 71% the year before.

Macquarie said its financial position comfortably exceeded regulatory minimum requirements, with group surplus capital of A$10.7 billion at the end of March. Its banking unit has a common equity tier 1 level 2 ratio of 13.6%.


Write to Alice Uribe at alice.uribe@wsj.com


(END) Dow Jones Newswires

05-02-24 1928ET