Macquarie Group Limited (ASX: MQG)
Satisfactory Trading in December 2017 Quarter: Macquarie Group’s financial position comfortably exceeded APRA’s Basel III regulatory requirements, and there was capital surplus of $A4.1 billion as on 31 December 2017 which was broadly in line with 30 September 2017. However, the Group’s APRA Basel III Common Equity Tier 1 capital ratio was 10.7 per cent as on 31 December 2017 which was down from 11.0 per cent as on 30 September 2017.
Meanwhile, Macquarie Capital experienced strong levels of activity during the quarter as 107 transactions were valued at $A35 billion which got completed globally and were driven primarily by advisory activity in Infrastructure and Energy. During the quarter, Principal Finance had portfolio additions of $A0.1 billion. Under Banking and Financial Services, the Australian mortgage portfolio of $A31.2 billion increased by four per cent as on 30 September 2017 while funds on platform amounted to $A85.3 billion and increased by eight per cent as on 30 September 2017. MQG expects that its combined net profit contribution from operating groups for the year ending 31 March 2018 will be slightly up as compared to FY 17. Accordingly, the Group’s results for FY 18 are currently expected to be up approximately by ten per cent on FY 17. Post March 18, Macquarie’s US effective tax rate is expected to reduce by approximately 25 per cent and it is expected that there will be no material impact on FY 18 NPAT due to the changes in the US corporate tax rates. However, the stock has witnessed a high price run-up; and despite the recent fall (5.09% in last five days, as at February 06, 2018), it looks “Expensive” at the current price of $101.73
Ratio Analysis (Source: Company Reports)
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