15 May 2007
Net profit of $A1.46bn – 15th consecutive year of record profit
Macquarie Bank now a global institution, but to remain headquartered in Australia
International income of $A3.46bn, a 70% increase on 2006 and 55% of the Bank’s operating income
Assets under management nearing $A200bn, 41% increase on 2006
Macquarie Bank today announced a $A1.46bn after tax profit attributable to ordinary equity holders for the full year to 31 March 2007, a 60% increase on the prior year and nearly six times the level of five years ago.
Macquarie Bank Chairman, Mr David Clarke, said: “Earnings per share increased 48% from $A4.00 to $A5.92. This is 4.5 times the level of earnings per share of five years ago.”
The Bank declared a second half dividend of $A1.90 per ordinary share, franked to 100%, taking total ordinary dividends for the year to $A3.15 per share, an increase of 47% from last year’s ordinary dividend of $A2.15 per share. The payout ratio for the total dividend was 54%, within the Bank’s stated target payout ratio of between 50% and 60% of net earnings.
“We expect future dividends will be fully franked for the next two years and thereafter at least 80% franked, subject to the future ratio of Australian to offshore-sourced income,” Mr Clarke said.
Mr Clarke said: “This was a year of substantial growth, particularly internationally but also in Australia. While overall income grew 49% to $A7.2bn, international income increased 70% to $A3.46bn. We regard the fact that total international income is now a majority of overall income as a watershed.
“The significant level of international growth across all Groups was particularly pleasing. We now have more than 3,500 international staff, an increase of 39% on the prior year (compared with the growth of our overall staff numbers of 22%). Our international colleagues account for 35% of all staff.
“About 80% of all assets in specialist funds and syndicates are located outside Australia. Activity in those specialist funds remained strong, with the assets in those funds performing well.”
Mr Clarke noted that over the last five years, total shareholder returns were 204% compared to 118% for the S&P/ASX All Ordinaries Index over the same period.
The Bank has created significant wealth for Australians: since their respective listings the Bank, together with its Australian-listed Macquarie-managed specialist fund vehicles, has delivered more than $A40bn in wealth for shareholders. Of this, more than $A30bn was generated for Australian shareholders and their beneficiaries – $A22bn through capital appreciation and $9bn from dividends and other distributions – either directly or indirectly through their superannuation investments.
The bank has never disclosed its compensation formula but says its remuneration structure has not changed in 40 years.
The bank grew its headcount from 12,700 to 14,600 in the six months to March 31, and now half of all employees work offshore.
Employees were paid a total $3.1 billion, taking the compensation ratio to 43 per cent.