Macquarie rides commodities volatility to post record profit

A BLOCKBUSTER result from Macquarie Group’s commodities trading business helped offset a downturn in dealmaking to deliver the bank a 10 per cent jump in annual profit. Net income rose to A$5.18 billion (S$4.6 billion) in the year to Mar 31, according to a statement on Friday (May 5). That topped the A$4.99 billion forecast from analysts surveyed by Bloomberg. The Australian investment bank will pay a final dividend of A$4.50 a share. “Against a less certain market and economic backdrop, the diversity of Macquarie’s activities and the expertise of our teams ensured we maintained strong performance during the year,” chief executive officer Shemara Wikramanayake said in the statement. Ructions in commodities markets drove a 54 per cent surge in profit from its commodities and global markets unit to A$6 billion as hedging and trading activity rose. That made the head of that business, Nick O’Kane, the highest-paid executive at the bank for the year. O’Kane is getting a 59 per cent boost to A$57.6 million for the year through March 2023, according to the firm’s annual report released on Friday. In contrast, Wikramanayake is getting a total of A$32.8 million, up 27 per cent from a year earlier. Macquarie shares dipped 1 per cent as of 11.40 am in Sydney, leaving this year’s advance at about 5.5 per cent.  Profit from Macquarie’s investment banking advisory business almost halved, compared with a year ago, falling to A$801 million. Mergers and acquisitions activity is down more than 40 per cent this year, according to data compiled by Bloomberg, as economic uncertainty and tighter lending markets give companies pause. The Sydney-based bank’s return on equity slipped to 16.9 per cent, from 18.7 per cent a year ago. BLOOMBERG