Macquarie Faces Profit Pressure as CFO Prepares to Exit

Mixed Financial Performance in 1Q26

Macquarie Group has revealed a nuanced start to its 2026 financial year, with net profit contribution for the first quarter ending June 30, 2025, falling short of the prior corresponding period. While Banking and Financial Services (BFS) and Macquarie Capital (MacCap) showed encouraging growth, these gains were more than offset by declines in Macquarie Asset Management (MAM) and Commodities and Global Markets (CGM).

BFS benefited from volume growth in its loan portfolio and deposits, despite margin pressures from competitive lending and deposit markets. MacCap’s performance was buoyed by increased income from its private credit portfolio and higher advisory fees, particularly in the Americas. Conversely, MAM’s results were impacted by the timing of investment income and asset realisations, though partially offset by rising performance fees. CGM faced challenges with reduced trading income in North American Gas and Power, despite stronger client activity in other financial markets sectors.

Robust Capital Position and Strategic Moves

Despite the profit dip, Macquarie’s financial foundation remains solid. The Group reported a capital surplus of A$7.6 billion above Australian Prudential Regulation Authority (APRA) regulatory minimums, down from A$9.5 billion the previous quarter, primarily due to dividend payments, employee equity awards, and increased business capital needs. Key regulatory ratios such as the Common Equity Tier 1 capital ratio stood at a healthy 12.7%, with liquidity coverage and stable funding ratios well above regulatory thresholds.

Macquarie also extended its on-market share buyback program by 12 months, with over A$1 billion of shares repurchased at an average price near A$190 per share. This move underscores the Group’s commitment to flexible capital management amid evolving market conditions.

Leadership Transition and Strategic Outlook

In a significant leadership update, CFO Alex Harvey announced his decision to step down by the end of 2025 and retire mid-2026, with Frank Kwok set to succeed him. Both executives bring nearly three decades of experience at Macquarie, ensuring continuity in financial stewardship during this transition.

Chair Glenn Stevens highlighted the Group’s disciplined capital allocation and strategic divestments, including the planned sale of North American and European Public Investments businesses to Nomura, expected to close by year-end. The Board also reaffirmed its focus on strengthening risk culture and regulatory compliance, acknowledging shareholder concerns around remuneration and risk management.

Navigating Uncertainty with Caution

Macquarie’s outlook remains cautiously optimistic. The Group is closely monitoring global economic conditions, inflation, interest rates, geopolitical risks, and regulatory developments that could influence near-term performance. Its diversified income streams, strong balance sheet, and risk management framework position it well to navigate these challenges and pursue medium-term growth opportunities, particularly in sustainability and adjacent markets.