Shares for Macquarie Group Ltd [ASX:MQG] are slightly down today after spiking over 3% since last week. At time of writing, Macquarie is trading at $138.39, higher than Thursday last week when they were trading at $134.12.
Macquarie is a diversified financial group operating in 27 countries. They provide services in banking, asset management and finance, advisory, investment and funds management services.
With a market cap of $49.13 billion, the company’s shares are up over 22% this year.
On 11 December, S&P Global Ratings agency upgraded Macquarie’s Bank Limited long-term credit rating to an A+, previously an A. The rating hadn’t changed in the last 28 years.
They also upgraded Macquarie’s Group Limited long-term credit rating to a BBB+ from a BBB.
In the view of the ratings agency, ‘the group and bank’s risk management capabilities have strengthened over time’.
As they mentioned in the release:
‘The Macquarie group and MBL’s performance and risk management outcomes pre and post the global financial crisis. Compared with a peer group of international banks, the volatility of the Macquarie group’s earnings has been lower for a sustained period and the group was able to deal with global credit headwinds.’
In November this year, Macquarie released its 2020 half-year report ending 30 September 2019. The company saw a net profit after tax of AU$1,457 million, up 11% from the same period last year (1H19). Yet this is down 13% from the half-year ended in 31 March 2019 (2H19).
Macquarie also announced an interim ordinary dividend of $2.50 per share (40% franked), an increase of over 16% since the same period last year. Yet again, this is almost 31% down from the 2H19 final dividend of $3.60 a share.
What could happen next?
Macquarie still expects the full-year results this year to be down compared to FY19. This is mainly due to market conditions, the impact of foreign exchange rate and regulatory uncertainties among other factors.
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Editor, The Rum Rebellion