How Did Macquarie Grow Profit 3% Amid Margin Pressures and Regulatory Challenges?
Macquarie Group Limited reported a 3% increase in half-year profit to $1.655 billion, driven by growth across its asset management, banking, commodities, and capital markets divisions. The group maintains robust capital and liquidity positions despite margin pressures and regulatory challenges.
- 1H26 profit up 3% year-on-year to $1.655 billion
- Strong growth in Banking and Financial Services loan portfolios and deposits
- Macquarie Asset Management benefits from higher performance fees
- Macquarie Capital sees increased M&A and brokerage income
- Robust capital position with APRA Basel III CET1 ratio at 12.4%
Overview of Financial Performance
Macquarie Group Limited has released its financial results for the half year ended 30 September 2025, reporting a net profit attributable to shareholders of $1.655 billion, a 3% increase compared to the prior corresponding period. This result, however, represents a 21% decline from the previous half, reflecting some margin compression and elevated expenses.
The group's diversified business model continues to underpin its performance, with contributions from its four main operating groups – Macquarie Asset Management (MAM), Banking and Financial Services (BFS), Commodities and Global Markets (CGM), and Macquarie Capital (MacCap).
Segment Highlights
BFS experienced robust growth, with home loan portfolios increasing by 13% to $160.3 billion and deposits rising 12% to $192.5 billion. This growth was supported by strong demand in lower loan-to-value and owner-occupier segments, alongside technology investments that enhanced digital banking experiences and customer satisfaction scores well above major peers.
Macquarie Asset Management reported higher performance fees, driven by asset realisations and fundraising success, despite some outflows in equity strategies. Assets under management reached $959.1 billion, boosted by favourable market movements and increased valuations.
Macquarie Capital saw a significant uplift in M&A fee income, particularly in the Americas and Australia-New Zealand regions, alongside increased brokerage income due to heightened market activity in Asia. The private credit portfolio grew steadily, supporting higher net interest income.
Commodities and Global Markets maintained stable income levels, with risk management and financial markets segments showing growth, offset by timing-related declines in inventory management income. Operating expenses rose due to platform investments and remediation-related costs.
Capital, Funding, and Regulatory Position
Macquarie's capital position remains strong, with an APRA Basel III Common Equity Tier 1 ratio of 12.4%, comfortably above regulatory minimums. The group’s funding profile is well diversified, with term funding maturities extending to an average of 4.4 years and deposits comprising 50% of total funding sources.
Regulatory compliance remains a focus, with ongoing remediation plans addressing ASIC proceedings and APRA governance updates. Macquarie continues to invest in technology and digital platforms to support scalable growth and regulatory requirements.
Outlook and Strategic Positioning
Looking ahead, Macquarie maintains a cautious but positive outlook. The group expects broadly stable or improved income streams across its businesses, subject to market conditions. Continued investment in digital banking, asset management capabilities, and capital solutions positions Macquarie to capitalize on structural growth trends and evolving client needs.
Macquarie’s conservative approach to capital, funding, and liquidity management provides resilience amid global economic uncertainties, while its diversified income streams and geographic reach offer multiple avenues for growth.
Bottom Line?
Macquarie’s solid capital base and diversified operations position it well for navigating market challenges and seizing growth opportunities ahead.
Questions in the middle?
- How will margin compression in BFS impact future profitability?
- What is the timeline and impact of the North American and European public investments divestment?
- How might ongoing regulatory proceedings and remediation efforts affect Macquarie’s risk profile?
