The Macquarie Group Ltd (ASX: MQG) share price is higher after the global investment bank announced a FY25 trading update for the third quarter.
Macquarie FY25 Q3 update
The ASX financial share reported that its net profit after tax (NPAT) for the nine months to 31 December 2024 was “broadly in line” year on year.
Macquarie said its annuity-style businesses, which refers to Macquarie Asset Management (MAM) and banking and financial services (BFS), saw a combined net profit contribution that was “substantially up” year on year, largely thanks to volume growth in BFS. MAM has benefited from higher performance fees and investment income.
The MAM business had assets under management (AUM) of A$942.7 billion at 31 December 2024, up 3% compared to September 2024.
BFS ended December 2024 with total deposits of A$163.8 billion, up 7% quarter on quarter, and home loans rose 5% to A$136.2 billion quarter on quarter.
The market-facing businesses of commodities and global markets (CGM) and Macquarie Capital, experienced a combined FY25 third quarter net profit contribution that was “substantially down” year on year because of subdued conditions in certain commodity markets and the (negative) timing of recognising income in its accounts for North American Gas and Power contracts in CGM.
Outlook for the Macquarie share price
Macquarie said it continues to maintain a cautious stance with a conservative approach to capital, funding and liquidity that positions it well to “respond to the current environment”.
The Macquarie managing director and CEO Shemara Wikramanayake said:
Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing investment in our operating platform; a strong and conservative balance sheet; and a proven risk management framework and culture.
Final thoughts on the Macquarie share price
Macquarie has proven to be one of the best ASX financial shares around, with an impressive ability to grow its operations and profit globally.
In the last 12 months, Macquarie shares have risen more than 20%. I’d prefer to buy it over Commonwealth Bank of Australia (ASX: CBA) shares or other major banks, but I wouldn’t call Macquarie cheap. There could be a better time to buy in the future when there are concerns about the global financial picture.
For me, there are other ASX dividend shares that I’d rather buy which are growing and offer a more compelling option for dividends.
