Australian financial services giant Macquarie Group has profited from extreme volatility on global commodity markets, recording a full-year net profit of A$4.7bn (US$3.3bn), up 56 per cent from the previous year.
The group’s commodities and global markets division was the biggest contributor to profit in the financial year that ended in March, as increased volatility pushed up demand for its hedging and trading services. Earnings before corporate costs and tax in that division were up 50 per cent to A$3.9bn.
Chief executive Shemara Wikramanayake said an energy supply crunch, followed by surging volatility in energy and commodity markets arising from the Russian invasion of Ukraine had driven this demand.
She said she did not expect the current financial year to produce a result that strong. But there was uncertainty in the near term, she added.
“Our commodities income is expected to be significantly down following the very strong result in [the fiscal year 2022], albeit volatility may create opportunities. We have a very uncertain year ahead of us,” she said.
Macquarie recorded strong results across all four divisions. Earnings from its investment banking arm, Macquarie Capital, nearly quadrupled to A$2.4bn, driven by asset sales in green energy, technology and business services sectors.
Earnings from its retail banking division grew 30 per cent to A$1.001bn, while earnings from the investment management arm Macquarie Asset Management were up 4 per cent to A$2.15bn.
Barrenjoey analyst Jon Mott said the “strong result” was 8 per cent above market expectations. “Strength in commodities, gains on sale from Green Investment Group, and robust global M&A activity were the key drivers,” he said in a note.
Macquarie will pay a final dividend of $A3.50 per share.