Macquarie’s energy in international commodities buying and selling has led to the enterprise unit’s head incomes 75 per cent greater than the Australian financial institution’s chief govt after the division helped the corporate to a document annual revenue in its monetary yr to the tip of March.
A 54 per cent rise in internet revenue for the commodities enterprise — which trades oil, fuel and electrical energy, predominantly in North America — to A$6bn ($4bn) meant its boss Nick O’Kane noticed his share of the revenue soar to A$58mn from A$36mn a yr earlier. His pay exceeded that of chief govt Shemara Wikramanayake — who earned A$33mn — for a second consecutive yr.
Macquarie, whose enterprise encompasses asset administration, retail and funding banking and commodities, reported a ten per cent rise in internet earnings for the yr to A$5.2bn because the efficiency in commodities offset a softer outcome on the core asset administration enterprise.
The financial institution maintained a cautious outlook regardless of a second yr of document revenue.
Glenn Stevens, chair of Macquarie, mentioned the fee to O’Kane was as a result of “time-honoured” profit-share mannequin on the Australian enterprise and mirrored the manager’s work in establishing the commodities enterprise over the previous twenty years. “That is an distinctive yr, so it isn’t a shock that it’s an distinctive quantity,” he mentioned.
Macquarie, which drew 71 per cent of its revenue from exterior Australia in the course of the interval, derived 51 per cent of total revenue from commodities in contrast with 23 per cent for the better-known asset administration operation, which specialises in infrastructure funding.
Belongings beneath administration elevated 10 per cent to A$871bn, however the division’s revenue over the yr dropped 23 per cent to A$2.3bn, with the unfavourable comparability on account of deal exercise within the yr earlier than.
John Storey, an analyst at UBS, mentioned the commodities enterprise was the “standout performer” with a “vivid” outlook for additional progress. The important thing query, he mentioned, was the sustainability of the efficiency.
Macquarie raised its full-year dividend to A$7.50 from A$6.22 a share however lowered the ratio of revenue it paid out in the course of the yr to 56 per cent from 60 per cent.
Wikramanayake mentioned this was on account of a extra cautious outlook and the necessity to put money into its natural progress moderately than constructing a struggle chest for offers.
“It behoves us to carry the capital for defensive causes,” she mentioned of the choice to extend its surplus capital to A$12.6bn.
The chief govt declined to touch upon experiences linking the corporate with an acquisition of British asset supervisor M&G.
