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THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
Two people discussing a chart on a tablet
Economic Updates
Policy Rate Update: Dovish BSP Narrows IRD 
June 19, 2025 DOWNLOAD
grocery-2-aa
Economic Updates
Inflation Update: Prices rise even slower in May 
June 5, 2025 DOWNLOAD
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
View all Reports

Region: Australia

Bonds Market Movements Top Picks Issuer List
  • Top Picks
  • Macquarie Bank
Sovereign Bonds

Macquarie Bank

  • Sector: Financial Services
  • Sub Sector: Banks
  • Region: Australia
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Fundamental View

AS OF 09 May 2025
  • Macquarie was tested during the global financial crisis, but managed to steer through the crisis without reporting losses. A strong balance sheet mitigated liquidity problems, but its banking unit had to turn to Australia’s central bank at that time for support.

  • The group has an impressive track record of managing risks and achieving good returns, and has built capabilities in a number of areas. Divestments are controlled based on the market environment. It has been a beneficiary of market volatility in the commodity space. Its Australian mortgage book has also shown strong but sensible growth.

Business Description

AS OF 09 May 2025
  • Macquarie grew out of the Australian business of Hill Samuel Australia, commencing operations in 1969. Macquarie Group Ltd (MGL) is the holding company and listed entity, under which there is the banking group Macquarie Bank Ltd (MBL) which consists of the Banking & Financial Services (BFS) and Commodities & Global Markets (CGM) businesses, and a non-banking group which consists of the Macquarie Asset Management (MAM) and Macquarie Capital (MC) businesses.
  • From the 1990s, the group has been associated with the "Macquarie Model" which focused on identifying cash-generating infrastructure assets & packaging them into funds that could be sold, with Macquarie taking fees as banker, arranger and asset manager.
  • It acquired asset managers including Delaware Investments in the US and Blackmont Capital in Canada, boutique investment bank Fox-Pitt Kelton and specialists such as Tristone Energy (Canada). It acquired US asset manager, Waddell & Reed in April 2021, which added around US$76 bn of assets under management. It has announced the sale of its public AM business in the US and Europe to Nomura.
  • MAM has AUM of ~A$938 bn as of FY24, mostly in "traditional" funds management but also including its specialist infrastructure and real assets funds.

Risk & Catalysts

AS OF 09 May 2025
  • Macquarie has sizable exposures to credit and equity risk, and so could be adversely impacted by falls in asset prices. In addition, volatile/weak markets could impede its ability to exit some of its investments. Its earnings profile partially depends on exits and therefore is lumpy in nature. So far it has managed this risk well.

  • As a relatively small group operating mainly in wholesale markets, it is vulnerable to a liquidity freeze, but it mitigates this through running a well-matched and liquid balance sheet.

  • It is a global leader in infrastructure investments and is well positioned for the green transition. It has been a strong beneficiary of volatility in commodity markets, a testament to its risk management capabilities.

  • Its banking unit, MBL, has been subject to enforcement action in Apr-21 by APRA over the incorrect treatment of some intra-group funding arrangements resulting in a A$500 mn operational risk overlay being applied as well as LCR and NSFR add-ons.

Key Metric

AS OF 09 May 2025
AUD mn 1H23 2H23 1H24 2H24 1H25
Operating Income 8,910 10,666 8,060 9,011 8,570
Operating Expense/Operating Income 62.8% 61.3% 73.4% 68.2% 69.1%
Net Profit 2,305 2,877 1,415 2,107 1,612
ROAE 15.6% 18.1% 8.7% 12.9% 9.9%
Total Impairments/Op Profit 8.6% 4.1% (5.5%) (8.8%) 2.8%
Annuity Business Profit Contribution 43.3% 27.0% 36.6% 36.4% 44.2%
MBL CET1 Ratio (APRA) 12.8% 13.7% 13.2% 13.6% 12.8%
MBL Liquidity Coverage Ratio 172% 214% 199% 191% 194%
MBL Net Stable Funding Ratio 116% 124% 114% 115% 110%
Scroll to view columns right arrow

CreditSight View Comment

AS OF 13 May 2025

Macquarie has a strong record of profitability since its inception. Its asset mgmt business focused on infrastructure, and more recently green assets, is a global leader. It manages risks and returns effectively, and in FY22+23 was a large beneficiary of O&G and power price volatility. The Australian banking business has steadily gained mortgage marketshare. Large investment disposals from asset mgmt and Macquarie Capital led to a record year in FY22; strong commodities outperformance led to another record in FY23. FY24 income was lower on lower a) asset realisations and b) gas & power inventory management and trading income. 2H25 net income was helped by asset sales. Capital is adequate, ALM is conservative, and being APRA regulated is a plus. We like the bank AT1s and short dated T2s.

Recommendation Reviewed: May 13, 2025

Recommendation Changed: July 25, 2024

see more issuers DOWNLOAD PDF
Recommended Issuers

Who We Recommend

Siam Commercial Bank

Bond:
SCBTB 3.9 24
Read Details

Pertamina

Bond:
PERTIJ 3.1 30 ​
Credit Rating:
-/BBB/-
Read Details

Kasikornbank

Bond:
KBANK 5.458 28
Read Details

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Bonds Market Movements Top Picks Issuer List
  • Top Picks
  • Commonwealth Bank of Australia
Bonds

Commonwealth Bank of Australia

  • Sector: Financial Services
  • Sub Sector: Banks
  • Region: Australia
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Fundamental View

AS OF 28 Mar 2025
  • CBA has a very strong franchise in Australia; it is the leader in the retail market and is making good progress in challenging NAB in business banking.

  • It has been the best managed of the Australian banks for many years, and has outperformed peers. It lost some of its luster in the latter part of the 2010s due to regulatory and compliance lapses amid charges of complacency, but has since improved into a better institution.

  • Its capital and liquidity position is robust, while asset quality is strong.

Business Description

AS OF 28 Mar 2025
  • Originally established by the Australian government in 1911, CBA functioned for some time as Australia's central bank until the establishment of the Reserve Bank of Australia in 1959. It remained under government ownership until the early 1990s, after which it underwent a transformation from a bureaucratic public sector bank into a widely respected commercial organisation.
  • Over the past twenty years, CBA has consolidated its position as the leading bank in Australia with a 24-28% share in household deposits and lending, helped by its acquisition during the 2008 crisis of Bank of Western Australia.
  • In New Zealand it owns ASB Bank, but otherwise has been selling non-core assets, including its life insurance business.

Risk & Catalysts

AS OF 28 Mar 2025
  • CBA’s financial health is closely linked to the Australian economy, in particular retail credit quality, mainly housing loans.

  • Earnings/NIMs are under pressure from strong mortgage market and deposit competition. Business banking growth however has been stellar and highly profitable.

  • Losses on housing loans have been minimal; the low stock on the housing market has led to home prices rising from Mar-23 onwards, contrary to expectations. Low rental vacancy rates (1%) and low unemployment rates (~4%) have been very supportive of asset quality. House prices are currently going through a soggy patch, but we are not concerned.

Key Metric

AS OF 28 Mar 2025
AUD mn Y21 Y22 Y23 Y24 1H25
Return on Equity 11.7% 12.7% 14.0% 13.6% 13.8%
Total Revenues Margin 2.3% 2.1% 2.2% 2.2% 1.1%
Cost/Income 47.0% 46.3% 43.7% 45.0% 45.2%
APRA CET1 Ratio 13.1% 11.5% 12.2% 12.3% 12.2%
International CET1 Ratio 19.4% 18.6% 19.1% 19.1% 18.8%
APRA Leverage Ratio 6.0% 5.2% 5.1% 5.0% 4.9%
Impairment Charge/Avg Loans 0.1% (0.0%) 0.1% 0.1% 0.0%
Gross Impaired Loans/Total Loans 0.4% 0.3% 0.4% 0.4% 0.5%
Liquidity Coverage Ratio 129% 130% 131% 136% 127%
Net Stable Funding Ratio 129% 130% 124% 116% 116%
Scroll to view columns right arrow

CreditSight View Comment

AS OF 14 May 2025

CBA operates as a well-oiled machine in the Australian banking market. It has the leading position in mortgages and deposits, and is challenging NAB in business banking. An AUSTRAC penalty in 2018 damaged its reputation and remediation costs impacted earnings for a couple of years. The bank sold a number of its non-bank business and equity investments to simplify and focus on its core domestic businesses. Strong mortgage market and deposit competition had capped NIMs despite higher cash rates. Business banking growth has been stellar and highly profitable. Asset quality is comfortable. Its CET1 ratio though strong has declined to below ANZ’s. It is our preferred name amongst the Aussie banks. Its seniors are fair, and we prefer its shorter call and bullet Tier 2s, the NC29s and bullet 31s.

Recommendation Reviewed: May 14, 2025

Recommendation Changed: October 05, 2016

see more issuers DOWNLOAD PDF
Recommended Issuers

Who We Recommend

Siam Commercial Bank

Bond:
SCBTB 3.9 24
Read Details

Pertamina

Bond:
PERTIJ 3.1 30 ​
Credit Rating:
-/BBB/-
Read Details

Kasikornbank

Bond:
KBANK 5.458 28
Read Details

How may we help you?

Search topics about wealth insights and investments.

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