Macquarie is Australia’s largest investment bank. Coming out of the financial crises it is also the only survivor out of all the listed financial engineering banks (Allco, Babcock and Brown).
Post crises, it has shifted its business to be less reliant on corporate finance and sold of the management rights of its listed infrastructure vehicles.
Now the business focus on the recurring nature of the asset management where it is one of the largest infrastructure asset manager in the world.
Macquarie’s earnings while less dependent than previous incarnations of the business are still reliant on the health and confidence of the global capital markets. It taps into London, Hong Kong and New York markets sourcing deals, advising clients and raising capital.
It is still Australia’s largest investment bank with a blue chip corporate finance contacts and cash equities business.
Macquarie share dividend
Using the financial year timeframe, the chart shows the last 5 years of dividends. The board has increased dividends every year since 2012. Long term investors should take a look further to pre GFC to understand what a crisis can have banking stocks even though the ground zero of the a housing bubble originated in the US.
Macquarie Bank share price relative performance
Chart below shows the performance of Macquarie share price relative to other listed banks. This include the Big 4, Suncorp and CYB. We did not include the smaller region banks for sake of simplicity.
Although the MQG tracks the performance of the broader banking sector. The company has a completely difference risk profile verses the likes of the big 4. The large Australian commercial banks earnings are dependent on the net interest margin, the difference between deposits and interest on mortgage book and business lending.
Whilst there are points of differentiation between the banks. Their earnings and risk profiles predominately track the performance of the Australian economy.