Australian financial services giant Macquarie Group took advantage of extreme volatility in global commodity markets, posting annual net profit of A$4.7 billion (US$3.3 billion), up 56% compared to the previous year.
The group’s commodities and global markets division was the biggest contributor to profit in the year that ended in March, as heightened volatility boosted demand for its hedging and trading services. This division’s profit before charges and taxes increased by 50% to reach 3.9 billion Australian dollars.
Chief executive Shemara Wikramanayake said an energy supply crisis, followed by increasing volatility in energy and commodity markets resulting from the Russian invasion of Ukraine, had driven this demand.
She said she did not expect the current exercise to produce such a strong result. But there was short-term uncertainty, she added.
“Our income on raw materials should be down sharply following the very good result of [the fiscal year 2022], although volatility can create opportunities. We have a very uncertain year ahead of us,” she said.
Macquarie delivered strong results across all four divisions. Revenue at its investment banking arm, Macquarie Capital, nearly quadrupled to A$2.4 billion, driven by asset sales in the green energy, technology and business services sectors .
Profits at its retail banking division rose 30% to A$1.001 billion, while profits at investment management arm Macquarie Asset Management rose 4% to A$2.15 billion.
Barrenjoey analyst Jon Mott said the “strong result” was 8% better than market expectations. “Commodity strength, Green Investment Group sales gains and robust global M&A activity were the key drivers,” he said in a note.
Macquarie will pay a final dividend of AU$3.50 per share.