Macquarie Group (ASX:MQG) has more than doubled its first-half profit to $2.04 billion and has announced a $1.5 billion capital raising in order to invest in new opportunities.
Net profit after tax of $2.04 billion for the six months ending 30 September 2021 (1H22) increased 107 per cent year-on-year and is close to being in line with the $2.03 billion for the half year ending 31 March 2021.
“This first half saw a significant increase in net profit contribution from all four operating groups compared with 1H21, a period which was affected by the Covid-19 pandemic. Today’s result is consistent with a strong 2H21 and reflects improved trading conditions across our diverse platform,” said CEO Shemara Wikramanayake.
The investment banking group is seeking to raise $1.5 billion via a non-underwritten institutional placement which will be followed by a non-underwritten share purchase plan. Macquarie Group said that the capital raising will provide additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive, while maintaining an appropriate capital surplus.
“Macquarie has experienced a period of sustained and material growth in capital requirements across our annuity-style and markets-facing activities. Having deployed $A5.5 billion of capital over 2H21 and 1H22, we continue to see a strong pipeline of opportunities. Raising new capital provides us with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive to our shareholders, while maintaining an appropriate capital surplus.”
Macquarie’s assets under management for the half year reached $737 billion, up 31 per cent half-on-half, primarily due to the acquisition of Waddell & Reed, positive impacts from foreign exchange, investment by Private Markets-managed funds and Public Investments positive net flows and market movements.
The banking division’s $482 million profit reflected strong home loan, business lending, platforms and deposits growth and lower credit impairment charges, partially offset by increased headcount and investment in technology to support growth. The group has affirmed that its financial position ‘comfortably exceeds regulatory minimum requirements. Macquarie has a capital surplus of $8.4 billion.
Shares in Macquarie Group (ASX:MQG) are in a trading halt and last traded at $197.83.