Millionaires’ factory Macquarie Group (ASX:MQG)
is looking to pour capital back into the business as they cut back on dividend payouts to “support business growth”.
The $58 billion bank flagged to investors that they would taper back its dividend payout range from 50 to 70 per cent, down from their usual dividend policy of 60 to 80 per cent. Macquarie’s change to dividends came as it seeks to take advantage of “improved trading conditions”.
“We have deployed $3.8bn of capital over the last nine months and, given our outlook, we see further opportunities over coming months. So it really is a reflection of the opportunities we see and the flexibility that reducing the payout ratio will provide” said Macquarie chairman Peter Warne.
The diversified investment bank reported solid FY21 results in May with net profit up 10 per cent to $3.1 billion when compared to the year before, driven by a 56 per cent net profit increase in their Commodity and Global Markets division.
In April, the bank was slapped with a $500 million capital buffer after multiple breaches by the regulator watchdog. APRA found that the banking giant breached liquidity issues and reprimanded them with a 15 per cent add on to the net cash outflow for poor risk management over several years. Additionally, the watchdog also slammed a 1 per cent adjustment to the total available funding of its net stable funding ratio calculation.
The bank has had a series of bad runs after the giant’s broking arm copped a $126,000 fine after enabling a participant preferencing functionality while acting as a broker for a buy-back in May. Embattled tech company Nuix (ASX:NXL)
hasn’t helped Macquarie after their disastrous float since December.
Despite this, Mr Warne noted that the Group’s record FY21 performance was testament to the resilience of Macquarie’s diverse businesses and staff, and the ability to adapt to changing market conditions. He also reiterated their commitment to reducing the emissions of the Group’s business operations to net zero operational emissions by 2025.
Shares in Macquarie Group (ASX:MQG)
are trading 0.4 per cent higher at $157.23.