MQG -1.09%: delivered a strong full-year result, with profit growth driven by its powerhouse commodities division as volatility across energy markets continues to support trading activity. While the headline profit was a strong beat, the market had likely priced in a lot of the upside given a solid read-through from US banks reporting strong trading desk numbers a few weeks ago.
- Net income: $4.85bn, +30% y/y (vs $4.41bn est.)
- Commodities & Global Markets profit: $4.22bn, +49% y/y
- Macquarie Asset Management profit: $2.6bn, +27% y/y
The standout was Commodities & Global Markets, where increased client hedging across gas, power and oil drove a sharp uplift in earnings.
The bank opted not to extend its buyback, instead prioritising growth opportunities, while regulatory issues and prior compliance breaches remain an overhang, highlighted by the reduction in executive remuneration – CEO Shemara Wikramanayake’s pay has been moderated to a cool $27.9million.
While earnings momentum remains strong and the commodities division continues to benefit from elevated volatility, the stock is now trading around all-time highs. If tensions in the Middle East ease over time, a moderation in volatility would likely see trading activity normalise, taking some heat out of earnings.
MM remains neutral toward MQG
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