The Macquarie Group Ltd (ASX: MQG) share price went up by 3% today after the investment bank announced its FY23 first quarter.
Macquarie was holding its annual general meeting (AGM) and told investors how the business performed.
Macquarie’s solid first quarter
The global investment bank said that it experienced “favourable” trading conditions, with the FY23 first quarter operating profit up on the prior corresponding period.
However, Macquarie did note that trading conditions did soften during the quarter.
Looking, at its balance sheet, Macquarie said that its financial position comfortably exceeded regulatory minimum requirements. It had surplus capital to the tune of $10.1 billion.
The bank common equity tier 1 (CET1) ratio was 12.3%.
Operating businesses
Macquarie likes to tell investors about two sides (and four segments) of its business.
The ‘annuity-style’ businesses are Macquarie Asset Management (MAM) and banking and financial services (BFS). Their combined net profit was “significantly up” year on year, primarily due to income from the Green Investment Group (GIG) asset realisations in MAM. MAM finished the period with A$773.9 billion of assets under management. The BFS contribution was broadly in line with profit last year. The home loan portfolio of $96.9 billion was up 8% on March 2022.
Macquarie also has ‘market-facing’ businesses called Macquarie Capital and commodities and global markets (CGM). Combined profit was up “slightly”, primarily due to “strong results” across the commodities platform in CGM, including the impact of timing of income recognition on gas transport and storage contracts and higher investment-related income in Macquarie Capital.
Outlook for the Macquarie share price and business
Macquarie said that it continues to maintain a cautious stance, with a “conservative approach to capital, funding and liquidity” that positions the company well for the current environment.
It said that it is “well-positioned” to deliver superior performance in the medium-term. Macquarie puts that down to its deep expertise in major markets, the strength of the business and geographic diversity and ability to adapt the portfolio to changing market conditions.
I think that Macquarie is one of the best financial businesses on the ASX, but it isn’t immune to negative impacts. I’m not sure if now is the right time to buy though, after a bit of a recovery for the Macquarie share price.
