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Macquarie warns that global trade is under “the strongest pressure for decades,” with Australian financial services giants predicting tariffs and predicting that a rethinking of decarbonisation strategies in some countries could hit economic growth.
On Friday, the asset manager reported an annual profit increase of 5%, slightly higher than market expectations, facilitating further bumper payments for top executives.
The Sydney-based company, known as the “billionaire factory,” said its executive team at $941 billion (US$6.022 billion), with net profit rising to $3.722 billion in March, rising to $3.722 billion ahead of Bloomberg’s $3.69 billion analyst expectations Bloomberg matched at $3.722 billion.
Revenues rose 2% to $17.2 billion against a “increasingly complex global background.” Macquarie’s shares rose 4% in Sydney on the news.
This performance has driven a big payout for Macquarie executives. Chief Executive Shemara Wickramanayake recorded an overall salary decline of $24 million, from $25.3 million the previous year to $25.3 million, due to a decline in profit sharing.
Simon Wright, who took over the goods and trade division that generated star pay for his leader last year, surpassed some of Wall Street’s most well-known executives, earning $22.7 million. Asset Management Head Ben Way won $12.7 million compared to $11.3 million the previous year.
However, the company sounded a note of caution in the new fiscal year with the imposition of US president tariffs and a pushback to renewable energy, a key investment area for Macquarie taking place in markets such as the US.
Glenn Stevens, former Australian Central Bank governor who is now chairman of Macquarie, said:
In March, Macquarie’s asset management and financial services sector accelerated profit growth as the global trading sector, a major power in recent years, recorded a more subdued performance due to lower levels of oil and gas trading.
Macquarie has positioned its operations to deal with market turbulence in recent months and has agreed to sell its international asset management division to Nomura in Japan in April, as it focuses on private markets outside of Australia.
However, the company is exposed to increased regulatory scrutiny in its domestic market. Corporate regulators have directed the appointment of independent experts to oversee the compliance structure due to ongoing concerns regarding derivative transactions in recent years.
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The Australian Securities and Investment Commission said this week it does not want a “band-aid fix” to the issue it identified in Macquarie.
Annual report issued Friday said Macquarie is reviewing the risk framework. “If any shortcomings are identified, the board asserts accountability,” he said.
Wickramanayake said Macquarie was “well positioned to deliver excellent performance” in the medium term, but he maintained a “cautious attitude” in the short term given the market volatility, the forex movement and uncertain timing of asset sales.
City analyst Thomas Strong said the company’s outlook “slightly softer than market expectations,” but it is likely that investors have already taken that into consideration.
