Macquarie Group has reported a solid third quarter for FY26, with significant profit gains in asset management and capital divisions, alongside steady growth in banking services. The group maintains a strong capital buffer, positioning itself well despite a cautious economic outlook.
- Substantial profit increase in Macquarie Asset Management driven by divestment gains
- Banking and Financial Services show modest growth amid competitive margin pressures
- Commodities and Global Markets deliver stable performance with higher asset finance income
- Macquarie Capital benefits from higher investment-related income despite lower fees
- Strong capital surplus of A$7.5 billion comfortably exceeds APRA Basel III requirements
A Quarter of Solid Gains
Macquarie Group Limited has released its third quarter update for the financial year ending March 2026, revealing a generally positive performance across its core divisions. The company’s Managing Director and CEO, Shemara Wikramanayake, described trading conditions as satisfactory, underscoring steady momentum despite a complex global backdrop.
Macquarie Asset Management (MAM) was a standout performer, with net profit contribution substantially higher than the same period last year. This uplift was largely attributed to a gain on sale from divesting its North American and European public investments business. Assets under management grew modestly to A$736.1 billion, buoyed by inflows into fixed income funds and favourable market movements, particularly in public investments.
Banking and Markets – Steady Progress
The Banking and Financial Services (BFS) division reported a slight increase in net profit contribution, supported by growth in the loan portfolio and deposits. However, this was tempered by margin compression due to heightened competition and shifts in portfolio composition. BFS deposits rose six per cent to A$204.5 billion, while the home loan portfolio expanded by seven per cent, signalling continued demand in retail lending.
Commodities and Global Markets (CGM) delivered a stable contribution, with improved income from asset finance offsetting higher operating expenses. Financial Markets income remained broadly consistent with the prior corresponding period, reflecting resilience amid market fluctuations.
Capital and Investment Income Strengthen Macquarie Capital
Macquarie Capital saw a substantial increase in net profit contribution, driven by higher investment-related income from asset realisations and its private credit portfolio, which reached A$28.9 billion with A$5.7 billion deployed in the quarter. Although fee and commission income declined due to the timing of large deals, the division’s overall performance was robust compared to the prior year.
On the regulatory front, Macquarie’s financial position remains strong, with a capital surplus of A$7.5 billion above Australian Prudential Regulation Authority (APRA) Basel III requirements. Key ratios such as the Common Equity Tier 1 capital ratio and leverage ratio held steady, reflecting a conservative and well-managed balance sheet.
Outlook – Cautious but Confident
Looking ahead, Macquarie maintains a cautious stance amid ongoing global economic uncertainties, inflationary pressures, and geopolitical risks. The company emphasises its conservative approach to capital, funding, and liquidity as a buffer against volatility. CEO Shemara Wikramanayake highlighted Macquarie’s diverse income streams, deep sector expertise, and ongoing investment in its operating platform as key strengths that position the group well for medium-term growth.
While the short-term outlook is influenced by factors such as market conditions, foreign exchange fluctuations, and regulatory changes, Macquarie’s strong capital base and risk management culture provide a solid foundation to navigate these challenges.
Bottom Line?
Macquarie’s robust Q3 performance and strong capital position set the stage for navigating a cautious economic environment ahead.
Questions in the middle?
- How will Macquarie’s private credit portfolio perform amid evolving credit market conditions?
- What impact might foreign exchange movements have on Macquarie’s international income streams?
- How will competitive pressures affect BFS margins and loan growth in coming quarters?