Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

FY20 Report: Is the Macquarie (ASX:MQG) share price a buy?

Is the Macquarie (ASX:MQG) share price a buy after releasing its FY20 report for the year to 31 March 2020?

Is the Macquarie (ASX: MQG) share price a buy after releasing its FY20 report for the year to 31 March 2020?

What is Macquarie?

Macquarie is Australia’s largest investment bank with operations spread throughout North America, Europe, Middle East, Asia and Australia. Unlike a traditional ‘retail’ bank, like most investment banks Macquarie makes a large chunk of its profit by operating in the investment markets and managing ‘assets’ for individuals and organisations. As of 2018, Macquarie had reported a profit for 49 years in a row.

Macquarie’s FY20 result

The global investment bank reported that its net profit of $2.73 billion was down 8% compared to FY19.

The biggest reason for the decline was that it recognised FY20 credit and other impairment charges of just over $1 billion. This was up from $552 million last year, the increase mainly related to the potential economic impacts of COVID-19.

Macquarie’s net profit decline was more pronounced in the second half with $1.27 billion of net profit generated, that was down 13% compared to the first half of FY20 and down 24% compared to the second half of FY19. The second half included impairment charges of $901 million.

One of Macquarie’s biggest profit generators is its assets under management (AUM). The company reported AUM was $606.9 billion, up 10% from the prior year.

Macquarie dividend and balance sheet

Macquarie’s Board has declared a second half dividend of $1.80 per share. That brings the full FY20 dividend to $4.30 per share, down 25% from FY19.

The investment bank had surplus capital of $7.1 billion over its minimum regulatory requirement. Its bank CET1 ratio was 12.2%.

Is the Macquarie share price a buy?

Before today’s movement, the Macquarie share price had dropped 34% from the COVID-19 crash. It’s an attractive drop considering how low interest rates are now. Its AUM continues to hold up well, which is good for earning management fees.

Whilst the Macquarie dividend cut was painful, it’s still paying a dividend. I believe Macquarie will be a better long term pick than the major ASX banks. But its earnings could be impacted for longer than some think.

I’d rather put my money into the below ASX technology shares instead:

[ls_content_block id=”18457″ para=”paragraphs”]

Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content