Macquarie Group Limited — AGM Information 2017

Jul 26, 2017

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Macquarie Group Limited 2017 Annual General Meeting

27 July 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result 1Q18 Update FY18 Outlook Appendices

Disclaimer

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The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (MGL) and is general background information about Macquarie’s (MGL and its subsidiaries) activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. The material contained in this presentation may include information derived from publicly available sources that have not been independently verified. Information in this presentation should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. No representation or warranty is made as to the accuracy, completeness or reliability of the information. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.

This presentation may contain forward looking statements – that is, statements related to future, not past, events or other matters – including, without limitation, statements regarding our intent, belief or current expectations with respect to Macquarie’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, provisions for impairments and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. Macquarie does not undertake any obligation to publicly release the result of any revisions to these forward looking statements or to otherwise update any forward looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation. Actual results may vary in a materially positive or negative manner. Forward looking statements and hypothetical examples are subject to uncertainty and contingencies outside Macquarie’s control. Past performance is not a reliable indication of future performance.

Unless otherwise specified all information is for the full year ended 31 March 2017.

Certain financial information in this presentation is prepared on a different basis to the Financial Report within the Macquarie Group Annual Report (“the Financial Report”) for the year ended 31 March 2017, which is prepared in accordance with Australian Accounting Standards. Where financial information presented within this presentation does not comply with Australian Accounting Standards, a reconciliation to the statutory information is provided.

This presentation provides further detail in relation to key elements of Macquarie’s financial performance and financial position. It also provides an analysis of the funding profile of Macquarie because maintaining the structural integrity of Macquarie’s balance sheet requires active management of both asset and liability portfolios. Active management of the funded balance sheet enables the Group to strengthen its liquidity and funding position.

Any additional financial information in this presentation which is not included in the Financial Report was not subject to independent audit or review by PricewaterhouseCoopers.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result 1Q18 Update FY18 Outlook Appendices

Agenda

1. FY17 Overview

2. Overview of Result

3. 1Q18 Update 4. FY18 Outlook

 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

FY17 Overview 01 Peter Warne – Chairman

 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Performance reflects mix and quality of Macquarie’s businesses

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• In FY17, Macquarie's businesses continued to grow with profit up 7.5% highlighting the diversity of our business offering and its ability to adapt to changing conditions

• Annuity-style businesses (Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services) combined net profit contribution up 4% on the prior year

• Capital markets facing businesses (Commodities and Global Markets and Macquarie Capital) combined net profit contribution up 12% on the prior year

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Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax.

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Financial performance

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Operating income $A10,364m Profit $A2,217m
FY17 OPERATING INCOME FY17 PROFIT
$Am $Am
12,000 2 % 2,500 2,000 7.5 %
ON FY16 ON FY16
1,500
8,000
1,000
500
4,000 -
FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17
EPS $A6.58 DPS $A4.70
$A FY17 EPS $A FY17 DPS
8.00 6 % 5.00 4.00 18 %
6.00 ON FY16 ON FY16
3.00 SYD Special Dividend [1]
4.00
2.00
2.00 1.00
- -
FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17
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$A4.70
FY17 DPS
18 %
ON FY16
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1. In 2H14 eligible shareholders also benefited from the SYD distribution in Jan 14 which comprised a special dividend of $A1.16 (40% franked) and a return of capital of $A2.57 per share.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result

1Q18 Update

FY18 Outlook

Appendices

FY17 dividend

FY17 ORDINARY DIVIDEND FROM $A4.70 $A4.00 (40% franked)

(45% franked) IN FY16

2H17 ORDINARY DIVIDEND FROM $A2.80 $A1.90 (45% franked) (45% franked) IN 1H17

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DIVIDEND POLICY REMAINS

FY17 ANNUAL PAYOUT RATIO 72%

60-80%

ANNUAL PAYOUT RATIO

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

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48 years of profitability

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$A2,217m
7.5 [%]
on
yrs
FY16
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$Ab 2.4 2.0 1.6 1.2

0.8 0.4 -

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result 1Q18 Update FY18 Outlook Appendices

Macquarie’s total shareholder return continues to outperform

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• Since 2007, Macquarie’s TSR of 97% outperformed the ASX 200 by 47% and the MSCI World Capital Markets Index by 123%

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Rebased to Total shareholder return
1 Aug 07
250
Macquarie (+97%) ASX 200 (+50%) MSCI World Capital Markets Index (-26%)
200
150
100
50
-
Aug 07 Feb 08 Aug 08 Feb 09 Aug 09 Feb 10 Aug 10 Feb 11 Aug 11 Feb 12 Aug 12 Feb 13 Aug 13 Feb 14 Aug 14 Feb 15 Aug 15 Feb 16 Aug 16 Feb 17
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Note: MSCI World Capital Markets Index, ASX 200 and Macquarie Group information is presented on a total return basis, quoted in local currency and rebased to 1 Aug 07. Source: Factset. Data to 25 Jul 17.

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Risk culture and conduct

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• Macquarie’s unbroken profitability is underpinned by our long-standing risk culture. This is reflected in our principles of Opportunity, Accountability and Integrity

• The Board plays a key oversight role in ensuring that Macquarie has a strong risk culture and effectively manages conduct risk

• A strong risk culture drives good conduct

• Macquarie’s risk culture and our management of conduct risk is well entrenched across all parts of the organisation

• Primary responsibility at the individual and business level

• Strong independent oversight by the Risk Management Group

• Effective consequence management

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Risk culture and conduct in practice

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Our risk management approach has been largely consistent since inception and we continue to monitor and enhance our risk culture and management of conduct risk

FY17 risk culture and conduct specific achievements

Code of Conduct refreshed and global policies enhanced

Appointment of Customer Advocate for retail and small business customers in Australia

Resources continued to be deployed into staff training across areas including compliance, anti-money laundering crime and counter terrorism financing

Additional risk culture and conduct risk objectives formally incorporated into performance management process for all staff

Integrity campaign

• Our long-standing risk culture is reflected in our principles of Opportunity, Accountability and Integrity

• A campaign was rolled out globally to staff highlighting the importance of good conduct through #integrity

• This had strong engagement across Macquarie through multiple internal communication channels

Our purpose is to realise opportunity for the benefit of our clients, our shareholders and our people. We’re in business to be profitable, but it’s the way we do business that defines us.

• Our integrity principles continue to be integrated into group-wide training programs and actively promoted by Group and regional heads

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

A longstanding commitment to renewable energy

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• Continue to support the transition to a low carbon economy

• Conventional energy sources will continue to deliver capacity to the global energy system for some time, as referenced in the Finkel Report

• Our businesses will adapt, adjust and continue to seek new opportunities in response to the decarbonisation of this sector

Global highlights

Agreed to acquire Green Investment Bank in the UK, creating one of Europe’s largest teams of green energy investment specialists

50% interest in Taiwanese offshore wind project Formosa 1 with 8MW of capacity and plans for a further 120MW by the end of 2019

$A15b

Invested or arranged into renewable energy projects since 2010

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Agreement in partnership with BRUC Capital to acquire up to 27 solar projects in Japan from IBC, with 37MW of capacity

Acquired a 50MW portfolio of commercial battery storage projects in development in California

6,670MW Renewable energy managed globally

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Major Bank Levy

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• The Major Bank Levy taxes 5 Australian banks on many of their non-retail deposit liabilities

• Macquarie Group’s banking activities are carried on by Macquarie Bank which largely comprises the Australian retail business in BFS, Lending and Leasing in CAF and much of its CGM business

• Macquarie Bank’s Australian operations represent approximately one third of Macquarie Bank’s earnings based on the FY17 result

• Macquarie Bank’s return on equity was approximately 10% in FY17 and its market share across most Australian retail products is approximately 2%

• The annualised cost of the new tax is estimated to be $A66m pre-tax based on FY17 earnings, which has the same effect as increasing the Australian effective tax rate for Macquarie Bank from 34% to 41%

• The impact of the levy would be greater in the event of a decline in Macquarie Bank’s profitability

• The new tax will have a disproportionately high impact on Macquarie Bank compared to the major Australian banks given our business mix is more heavily weighted to wholesale and international business

• We have expressed our concern to the Government given the size of our banking operations, the benefit we bring to domestic competition and innovation, and the role we play in bringing offshore income into the Australian economy

• We will continue to review our business mix and location to ensure all our businesses remain profitable and internationally competitive, noting that our international competitors are not subject to this tax

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Key management changes

• Following the merger of MSG and CFM to create CGM in Nov 16, Andrew Downe, who led CFM, was appointed Group Head of CGM

• Stevan Vrcelj stepped down from his role as Group Head of MSG and from the Executive Committee, of which he had been a member since 2010

• Michael McLaughlin, US Country Head and Head of Credit Markets Division, stepped down from the Executive Committee in June 2017, of which he had been a member since 2012

New Executive Committee member

Nick O’Kane , Head of Commodity Markets and Finance, joined the Executive Committee in June 2017. Nick has worked for Macquarie for 22 years in Australia, Malaysia, Korea, London, Los Angeles and, since 2009, leading our global energy markets business from Houston

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Macquarie Group Foundation Providing support to hundreds of community organisations globally each year

FY17 $A29.4m donated by staff and Foundation

50,000[+] 1,350[+] HOURS CHARITIES SUPPORTED MORE THAN $A300m since 1985

SYDNEY

HONG KONG

LONDON

NEW YORK

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Overview of the result for the year ended 31 March 2017 02 Nicholas Moore Managing Director and Chief Executive Officer

 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update FY18 Outlook Appendices

FY17 result: $A2,217m up 7.5% on FY16

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Operating income Operating profit before tax Profit Return on equity (%) Earnings per share Dividends per share					FY17 v FY16 2% 3% 7% 3% 6% 18%
	FY16 $Am	FY17 $Am
	10,158	10,364
	3,015	3,104
	2,063	2,217
	14.7	15.2
	$A6.19	$A6.58
	$A4.00	$A4.70

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Where we make our income

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International income 63% of total income[1] Total staff 13,597; International staff 55% of total

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Total staff 13,597; International staff 55% of total Americas
INCOME STAFF
INCOME Europe, Middle East and Africa STAFF Asia $A2,711m 2,502
27% OF TOTAL
INCOME STAFF
$A2,484m 1,509 CANADA USA Nashville
24% OF TOTAL Calgary Austin New York
$A1,238m 3,450 Montreal Boca Raton Philadelphia
EUROPE Luxembourg MIDDLE EAST 12% OF TOTAL TorontoVancouver BostonChicago San DiegoSan Francisco
DublinFrankfurtGenevaGlasgowLondon MadridMunichParisViennaZurich Abu DhabiDubai SOUTH AFRICA Cape Town J ohannesburg ASIA BangkokBeijingGurugramHong Kong JakartaKuala LumpurManilaMumbaiSeoul ShanghaiSingaporeTaipeiTokyo LATIN AMERICA Mexico CityRibeirao PretoSao Paulo DenverHoustonJacksonvilleLos Angeles San Jose
Australia [2]
INCOME STAFF
$A3,702m 6,136
37% OF TOTAL
AUSTRALIA Melbourne Sydney
Adelaide Parramatta Manly
Brisbane Gold Coast NEW ZEALAND
Canberra Perth Auckland
As at 31 Mar 17. 1. Net operating income excluding earnings on capital and other corporate items. 2. Includes New Zealand.
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As at 31 Mar 17. 1. Net operating income excluding earnings on capital and other corporate items. 2. Includes New Zealand.

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Growth of Annuity-style vs Capital markets facing businesses since FY13

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Annuity-style businesses represent approximately 70% of the Groups’ performance[1]

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5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
FY13 FY14 FY15 FY16 FY17
Annuity-style businesses: Macquarie Asset Management Corporate and Asset Finance Banking and Financial Services
Capital markets facing businesses: Commodities and Global Markets Macquarie Capital
($Am)
2
Net profit contribution
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Comparative figures have been restated to conform to changes in current year financial presentation and group restructures, where necessary. 1. Based on FY17 net profit contribution from operating groups. 2. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax.

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MAM
33 %
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ANNUITY-STYLE BUSINESS Macquarie Asset Management

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Assets under management $A480b
MIRA MIM MSIS
$A77.2b $A320.3b $A4.4b
EQUITY UNDER ASSETS UNDER INVESTOR FUNDS ON
$A1.5b MANAGEMENT MANAGEMENT MIDIS PLATFORM
Net profit 6ON FY16% $A15.6b New institutional mandates $A6.5b
and contributions funded:
New equity raised Commitments on
Australia $A5.9b MIDIS platform
$A13.7b
Invested equity Asia $A5.6b $A0.7b
$A2.6b 24 acquisitions and North America $US2.4b New loans to Private
Operating income 4% 12 follow-on investments EMEA $US1.7b Equity Secondaries funds
$A10.2b
ON FY16
Equity to deploy
FY17 AWARDS Infrastructure Asset ManagerWorld’s Largest [1] Infrastructure Managerof the Year Award [2] Money Management/Lonsec Awards [3] Infrastructure Debt Managerof the Year, Europe [4]
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Note: References relate to the full year ended 31 Mar 17. All references to net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups. 1. Global Alternatives Survey 2016 (published Jul 16). 2. Institutional Investor’s 2016 European Money Management Awards (published Apr 16). 3. From May 2016 – May 2017. For more information and disclosures about these awards, visit: https://www.delawarefunds.com/MAMglobalcommunications. 4. Private Debt Investor Awards 2016 (published Mar 17).

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CAF 25 %

ANNUITY-STYLE BUSINESS Corporate and Asset Finance

Asset and loan portfolio $A36.5b

$A1.2b Net profit 6% ON FY16 $A1.8b

Operating income 6% ON FY16

Asset finance Lending’s funded portfolio $A29.7b portfolio $A6.8b[1]

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One of Australia’s largest vehicle financiers, with over

204 planes

610,000 cars

Largest

979 Locomotives and wagons

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smart meter funder in the UK, and largest independent smart meter funder in Australia[2]

Note: References relate to the full year ended 31 Mar 17. All references to net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups. 1. Includes Real Estate Structured Finance legacy run-off portfolio and equity portfolio of $A0.4b. 2. Independent from retail energy providers.

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BFS 11 %

ANNUITY-STYLE BUSINESS Banking and Financial Services

$A35.8b Australian loan portfolio Personal banking Wealth management Business banking $A513m 28.7b 1% 72.2b 24% 6.5b 10% Net profit 47% ON FY16 Australian mortgage Funds on platform[1] Business Banking portfolio loan portfolio $A1.6b

More than 1 million clients around Australia

Operating income 13% ON FY16

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Note: References relate to the full year ended 31 Mar 17. All references to net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups. 1. Funds on platform includes Macquarie Wrap and Vision.

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CGM 21 %

CAPITAL MARKETS FACING BUSINESS Commodities and Global Markets[1]

Covering 25+ market segments, with 160+ products

$A971m Net profit 15%% ON FY16

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Deep markets experience
Net profit 15%%
ON FY16 10+ Energy No. IPOs in
1 ANZ [2]
Agriculture,
20+ No. US physical gas
foreign exchange
$A2.9b 4 marketer in
North America [3]
Operating income 1%
Metals,
ON FY16
30+ equities, futures 2,300+ [Stocks covered]
Commodity House of the Year Excellence in Agriculture & Softs Markets
1 3rd consecutive year 1 7th consecutive year
YEARS
4
No. No.
FY17 AWARDS
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Note: References relate to the full year ended 31 Mar 17. All references to net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups. 1. Formerly Macquarie Securities Group and Commodities and Financial Markets. 2. Dealogic. 3. Platts Q4 CY16. 4. 2016 Commodity Business Awards, presented by Commodities Now Magazine.

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MACCAP 10 %

CAPITAL MARKETS FACING BUSINESS Macquarie Capital

Globally diversified with a core strength in real assets

417 transactions valued at $A159b $A483m Net profit 7% No.1 in Infrastructure M&A advisory globally[1] ON FY16 No. M&A transactions No. Technology LBO 1 in ANZ[2] 1 Bookrunner in the US[3] $A1.2b Operating income 2% No. IPOs No. Infrastructure/Project ON FY16 1 in ANZ[2] 1 Advisory in the UK[4] Best M&A Deal (ANZ) Asia-Pacific Infra Deal of the year North America Capital Raise of the Year European & African Financial Adviser Ausgrid long-term lease for $A16.2b Manila Light Rail Transit 1 PPP Lennar Multifamily Venture[5] of the Year

Note: References relate to the full year ended 31 Mar 17. All references to net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups. 1. Infradeal, CY16, by deal value, (M&A Advisory, announced). 2. Dealogic, by deal value FY17, Announced and Completed M&A (any ANZ Involvement, ex-Fairness Opinions) and ANZ IPOs. 3. Bloomberg CY16. 4. InfraDeals 2016. 5. PERE Magazine.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Business backed by strong funding and capital

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MGL funded balance sheet APRA Basel III surplus capital [6]
Credit ratings
31 March 2017 31 March 2017
$Ab
140
130
120
110 Short-term [1] Cash,
liquids &
100 self
securitised
90 assets [3]
80 Customer
Deposits
70
Trading &
60 Short-term [4]
$A5.5b
50 26 years 21 years 25 years
40
30 Term [2]
Term [5]
20 ‘A’ RATED
10
-
Funding sources Funded assets
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1. ‘Short-term’ funding includes short-term wholesale issued paper and other debt maturing in the next 12 months. 2. ‘Term’ funding sources includes debt maturing beyond 12 months plus equity and hybrids. 3. ‘Cash, liquids and self securitised assets’ includes self securitisation of repo eligible Australian mortgages originated by Macquarie. 4. ‘Trading & short-term’ funded assets includes net trading assets and loan assets (incl. op lease) maturing in the next 12 months. 5. ‘Term’ funded assets includes debt investment securities, equity investments, PPE and loan assets (incl. op lease) maturing beyond 12 months. 6. Calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result 1Q18 Update

FY18 Outlook Appendices

1Q18 Update 03 Nicholas Moore Managing Director and Chief Executive Officer

 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update FY18 Outlook Appendices

1Q18 Macquarie update

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• Operating groups performing in line with expectations

• 1Q18 operating group contribution[1] up on pcp and down on a strong prior quarter

1Q18 contribution[1] vs 1Q17

• Annuity-style Continued to perform well: businesses ~70%[2] • Base fees in MAM broadly in line; performance fees down on pcp • CAF Lending up on pcp, mainly due to the timing of transactions • Continued growth in BFS particularly in mortgages, business banking and deposit books

• Capital markets facing Experienced improved trading conditions across most markets:

• businesses ~30%[2] • Stronger activity in CGM, largely due to improved equity market conditions • Increased client activity in DCM in MacCap; Principal book performing in line with expectations

• No significant one-off items

1. Represents management accounting profit before unallocated corporate costs, profit share, income tax and period end reviews. 2. Annuity-style businesses consists of Macquarie Asset Management, Corporate and Asset Finance, and Banking and Financial Services. Capital markets facing businesses consists of Commodities and Global Markets and Macquarie Capital. Percentage split is based on FY17 net profit contribution from operating groups.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Annuity-style businesses 1Q18 Update

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	FY17 contribution1	Activity during the quarter
Macquarie Asset Management	33%	• AUM of $A460.8b down 4% on Mar 17 (MIRA EUM of $A74.2b down 4%), largely due to net asset realisations in MIRA, partially offset by favourable market and FX movements • Performance fees from several funds including Macquarie Atlas Roads • MIRA invested equity of $A3.0b across 4 acquisitions and 7 follow-on investments in Infrastructure and Real Estate in 5 countries • MIM awarded over $A3.1b in new institutional mandates across 9 strategies from clients in 5 countries • MSIS awarded over $A800m of new and additional infrastructure debt mandates
Corporate and Asset Finance	25%	• Asset and loan portfolio of $A36.2b, broadly in line with Mar 17 • Portfolio additions of $A0.9b in corporate and real estate lending across new primary financings and secondary market acquisitions • $A0.8b of motor vehicle and equipment leases and loans securitised
Banking and Financial Services	11%	• Total BFS deposits2 of $A47.3b, up 6% on Mar 17 • Australian mortgage portfolio of $A29.4b, up 2% on Mar 17 • Funds on platform3 of $A79.1b, up 10% on Mar 17 largely due to the final migration of full service broking accounts to the Vision platform • Business banking loan portfolio of $A6.7b, up 3% on Mar 17 • Entered into exclusive due diligence with Morgan Stanley to provide administration services and develop a new white labelled Wrap offering • Won Best Digital Banking Offering and Most Innovative Card Offering at the 2017 Australian Retail Banking Awards

1. Based on FY17 net profit contribution from operating groups. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. 2. BFS deposits excludes corporate/wholesale deposits. 3. Funds on platform includes Macquarie Wrap and Vision.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Capital markets facing businesses 1Q18 Update

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	FY17 contribution1	Activity during the quarter
Commodities and Global Markets	21%	• Client hedging and trading opportunities remained steady across the commodities platform • Continued strong customer activity in foreign exchange, interest rates and futures markets driven by ongoing market volatility • Increased ECM activity and market turnover in Cash Equities • Entered into an agreement to acquire Cargill’s North American Power and Gas business to expand the geographic and service coverage in key markets in the region • Announced the merger of the Energy Markets and Metals, Mining and Agriculture divisions to form one commodities division called Commodity Markets and Finance
Macquarie Capital	10%	• Increased client activity in DCM, while ECM and M&A activity remained subdued2 • 97 deals completed at $A45b, up on pcp and broadly in line with prior period (by value)3 • Principal book performing in line with expectations • No.1 for global Infrastructure Finance financial advisory4 • No.1 for announced and completed M&A deals5 and No.1 for IPO and ECM deals in Australia5

1. Based on FY17 net profit contribution from operating groups. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. 2. Compared to the prior corresponding period. 3. Prior corresponding period and prior period deal values have been adjusted to reflect final transaction data. These changes are not material. 4. IJ Global 1H CY17, by deal count. 5. Thomson Reuters, Apr to Jun 17 (values in USD).

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Funded balance sheet remains strong

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Term liabilities cover term assets

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----- Start of picture text -----

31 Mar 16 31 Mar 17 30 Jun 17
$Ab $Ab $Ab
140 140 140
ST wholesale issued paper (7%)
120 Other debt maturing in the 120 ST wholesale issued paper (5%) 120 ST wholesale issued paper (7%)
next 12 months [1] (9%) securitised assets Cash, liquids and self [4] (34%) Other debt maturing in thenext 12 months [1] (9%) Cash, liquids and self Other debt maturing in thenext 12 months [1] (9%) Cash, liquids and self
100 100 securitised assets [4] (32%) 100 securitised assets [4] (31%)
Customer deposits
80 (33%) Trading assets 80 Customer deposits 80 Customer deposits(40%) Trading assets
(16%) (40%) Trading assets (19%)
(18%)
60 Loan assets (incl. op lease) 60 60 Loan assets (incl. op lease)
< 1 year (10%) Loan assets (incl. op lease) < 1 year (11%)
< 1 year (11%)
40 Debt maturing beyond12 months [2] (39%) 40 Debt maturing beyond12 months [2] (33%) 40 Debt maturing beyond12 months [2] (32%)
Loan assets (incl. op lease) Loan assets (incl. op lease) Loan assets (incl. op lease)
> 1 year [5] (34%) > 1 year [5] (33%) > 1 year [5] (33%)
20 20 20
Equity and hybrids [3] Equity and hybrids [3] Equity and hybrids [3]
(12%) Equity investments (13%) Equity investments (12%) Equity investments
- and PPE [3,6] (6%) - and PPE [3,6] (6%) - and PPE [3,6] (6%)
Funding sources Funded assets Funding sources Funded assets Funding sources Funded assets
----- End of picture text -----

These charts represent Macquarie’s funded balance sheets at the respective dates noted above. 1. ‘Other debt maturing in the next 12 months’ includes Structured Notes, Secured Funding, Bonds, Other Loans, Loan Capital maturing within the next 12 months and Net Trade Creditors. 2. ‘Debt maturing beyond 12 months’ includes Loan Capital not maturing within next 12 months. 3. Non-controlling interests have been netted down in ‘Equity and hybrids’ and ‘Equity Investments and PPE’. Mar 16 has been restated accordingly. 4. ‘Cash, liquids and self securitised assets’ includes self securitisation of RBA repo eligible Australian mortgages originated by Macquarie. 5. ‘Loan Assets (incl. op lease) > 1 year’ includes Debt Investment Securities. 6. ‘Equity Investments and PPE’ includes Macquarie’s co-investments in Macquarie-managed funds and equity investments.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result 1Q18 Update FY18 Outlook Appendices

Basel III capital position

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• APRA Basel III Group capital at Jun 17 of $A17.5b, Group capital surplus of $A4.0b[1]

• APRA’s proposal to establish ‘unquestionably strong’ Australian banking sector capital ratios by 2020 would increase MBL’s minimum capital requirements by approximately $A1.4b. APRA has stated that the increased capital requirements will include any changes from the finalisation of Basel III

• Current capital surplus is sufficient to accommodate the proposed increase

$Ab

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----- Start of picture text -----

8.0 Group regulatory surplus: Basel III (Jun 17)
7.0
(1.3)
6.0 (0.3) 0.1
5.0 (1.9)
4.0 Based on 8.5%
7.4 (minimum Tier 1
3.0 ratio + CCB) 5.8 5.9
2.0 4.0 4.0
1.0
- Harmonised Basel III FY17 Final Dividend and Hybrid Capital Buyback 2 Other 3 Harmonised Basel III APRA Basel III 4 APRA Basel III
at Mar 17 MEREP at Jun 17 'super equivalence' at Jun 17
----- End of picture text -----

1. Calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110. The APRA Basel III Group capital surplus is $A5.3b calculated at 7% RWA, per the internal minimum Tier 1 ratio of the Bank Group. 2. $US250m of Exchangeable Capital Securities (“ECS”) bought back in Jun 17. 3. Includes current quarter P&L net of business growth, the net impact of hedging employed to reduce the sensitivity of the Group’s capital position to FX translation movements and other movements in capital supply and requirements. 4. APRA Basel III ‘super-equivalence’ includes the impact of changes in capital requirements in areas where APRA differs from the BCBS Basel III framework and includes full CET1 deductions for equity investments ($A0.6b); differences in mortgages treatment ($A0.5b); capitalised expenses ($A0.5b); investment into deconsolidated subsidiaries ($A0.2b); DTAs and other impacts ($A0.1b).

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Strong regulatory ratios

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Bank Group (Jun 17)

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----- Start of picture text -----

17.5% 250%
6.8%
7.0%
14.0% 13.1% 6.0% 200%
5.0%
5.9%
10.5% 150% 163%
10.9% 4.0%
7.0% 3.0% 100%
2.0%
3.5% 50%
1.0%
- - - 2
CET1 ratio Leverage ratio LCR
Bank Group (Harmonised )1 Bank Group (APRA) Basel III minimum3
----- End of picture text -----

1. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework. 2. Average LCR for Jun 17 quarter is based on an average of daily observations. 3. Includes the capital conservation buffer in the minimum CET1 ratio requirement. The minimum BCBS Basel III leverage ratio requirement of 3% is effective from 1 Jan 18.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

FY18 Outlook 04 Nicholas Moore Managing Director and Chief Executive Officer

 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Factors impacting short-term outlook

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FY18 combined net profit contribution from operating groups expected to be broadly in line with FY17

Annuity-style businesses

Macquarie Asset Management

• FY17: $A1.5b down 6% on FY16

• Base fees expected to be broadly in line

• Performance fees and investment-related income expected to be broadly in line, subject to timing of asset realisations

Corporate and Asset Finance

• FY17: $A1.2b up 6% on FY16

• Leasing book broadly in line

• Reduced loan volumes in Lending

• Timing and level of early prepayments and realisations in Lending

Banking and Financial Services

• FY17: $A0.5b up 47% on FY16

• Higher loan portfolio, deposit and platform volumes

• Non-recurrence of gain on sale of life business and reduced project-related expenses

• Reduced impairments with respect to equity investments and intangibles

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MAM
CGM
FY17
CAF
MacCap
BFS
Corporate
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• Compensation ratio to be consistent with historical levels

• Based on present mix of income, currently expect FY18 tax rate to be broadly in line with FY17

Capital markets facing businesses

Commodities and Global Markets

• FY17: $A1.0b up 15% on FY16

• Strong customer base expected to drive consistent flow across Commodities, Fixed Income and Futures

• Lower levels of impairments and investment-related income expected

• Cargill acquisition not expected to have material impact

Macquarie Capital

• FY17: $A0.5b up 7% on FY16

• Assume market conditions broadly consistent with FY17

• Solid pipeline of Principal realisations expected

• GIB completion on track

34

Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY17 net profit contribution from operating groups.

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Short-term outlook

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• We currently expect the FY18 combined net profit contribution[1] from operating groups to be broadly in line with FY17

• The FY18 tax rate is currently expected to be broadly in line with FY17

• Accordingly, the Group’s result for FY18 is currently expected to be broadly in line with FY17

• Our short-term outlook remains subject to:

• Market conditions

• The impact of foreign exchange

• Potential regulatory changes and tax uncertainties

35

1. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax.

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Medium-term

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• Macquarie remains well positioned to deliver superior performance in the medium-term

• Deep expertise in major markets

• Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions

• Annuity-style income is provided by three significant businesses which are delivering superior returns following years of investment and recent acquisitions

  • Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services

• Two capital markets facing businesses well positioned to benefit from improvements in market conditions with strong platforms and franchise positions

  • Commodities and Global Markets and Macquarie Capital

• Ongoing benefits of continued cost initiatives

• Strong and conservative balance sheet

• Well matched funding profile with minimal reliance on short-term wholesale funding

• Surplus funding and capital available to support growth

• Proven risk management framework and culture

36

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Approximate business Basel III Capital & ROE

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31 Mar 17

Operating Group	APRA Basel III Capital 1 @ 8.5% ($Ab)	Approx. FY17 Return on Ordinary Equity2	Approx. 11-Year Average Return on Ordinary Equity 2
Annuity-style businesses	8.3
Macquarie Asset Management	1.7	22%	20%3
Corporate and Asset Finance	4.4
Banking and Financial Services	2.2
Capital markets facing businesses	4.6
Commodities and Global Markets	2.9	15%	15% - 20%
Macquarie Capital	1.7
Corporate	0.3
Total regulatory capital requirement @ 8.5%	13.2
Group surplus	5.5
Total APRA Basel III capital supply	18.74

1. Business Group capital allocations are indicative and are based on allocations as at 31 Dec 16 adjusted for material movements over the Mar 17 quarter. 2. NPAT used in the calculation of approx. annualised ROE is based on operating group’s net profit contribution adjusted for indicative allocations of profit share, tax and other corporate expenses. Accounting equity is attributed to businesses based on regulatory capital requirements. 11-year average covers FY07 to FY17, inclusively. 3. CAF returns prior to FY11 are excluded from the 11-year average as they are not meaningful given the significant increase in scale of CAF’s platform over this period. 4. Comprising of $A15.6b of ordinary equity and $A3.1b of hybrids.

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Medium-term

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Macquarie Asset Management (MAM)

• Annuity-style business that is diversified across regions, products, asset classes and investor types

• Diversification of capabilities allows for the business to be well placed to grow assets under management in different market conditions

• Well positioned for organic growth with several strongly performing products and an efficient operating platform

Annuitystyle businesses

Corporate and Asset Finance (CAF)

• Leverage deep industry expertise to maximise growth potential in loan and lease portfolios

• Positioned for further asset acquisitions and realisations, subject to market conditions

• Funding from asset securitisation throughout the cycle

Banking and Financial Services (BFS)

• Strong growth opportunities through intermediary and direct retail client distribution, white labelling, platforms and client service

• Opportunities to increase financial services engagement with existing business banking clients and extend into adjacent segments

• Modernising technology to improve client experience and support growth

Commodities and Global Markets (CGM)

• Opportunities to grow commodities business, both organically and through acquisition

• Development of institutional coverage for specialised credit, rates and foreign exchange products

Capital markets facing businesses

• Increase financing activities

• Growing the client base across all regions

• Well positioned for a recovery in equity market activity levels through both improved market rankings combined with existing strong research platform and strong market position in Asia

Macquarie Capital (MacCap)

• Positioned to benefit from any improvement in M&A and capital markets activity

• Continues to tailor the business offering to current opportunities, market conditions and strengths in each region

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Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview Overview of the result

1Q18 Update

FY18 Outlook Appendices

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A APPENDIX
Glossary
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 MACQUARIE 2017

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Glossary

$A / AUD	Australian Dollar
$C / CAD	Canadian Dollar
$US / USD	United States Dollar
£ / GBP	Pound Sterling
€	Euro
1H17	Half-Year ended 30 September 2016
1H18	Half-Year ending30 September 2017
1Q17	Quarter ended 30 June 2016
1Q18	Quarter ended 30 June 2017
2H17	Half-Year ended 31 March 2017
ABN	Australian Business Number
ADI	Authorised Deposit-TakingInstitution
AML	Anti-MoneyLaundering
ANZ	Australia and New Zealand
Approx.	Approximately
APRA	Australian Prudential Regulation Authority
APTT	Asian PayTelevision Trust
ASX	Australian Stock Exchange
AUM	Assets under Management
AVS	Available For Sale

BCBS	Basel Committee on BankingSupervision
BFS	Bankingand Financial Services
CAF	Corporate and Asset Finance
CCB	Capital Conservation Buffer
CCP	Central Counterparty
CET1	Common EquityTier 1
CGM	Commodities and Global Markets
CLF	Committed Liquid Facility
CMA	Cash Management Account
CMBS	Commercial Mortgage-Backed Securities
CRM	Customer RelationshipManagement
CY16	Calendar Year ended 31 December 2016
CY17	Calendar Year ending31 December 2017
DCM	Debt Capital Markets
DPS	Dividends Per Share
DRP	Dividend Reinvestment Plan
DTA	Deferred Tax Asset
ECM	EquityCapital Markets
EMEA	Europe,the Middle East and Africa
EPS	Earnings Per Share

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40

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook Appendices

Glossary

EUM	EquityUnder Management
FX	Foreign Exchange
FY07	Full Year ended 31 March 2007
FY08	Full Year ended 31 March 2008
FY09	Full Year ended 31 March 2009
FY11	Full Year ended 31 March 2011
FY13	Full Year ended 31 March 2013
FY14	Full Year ended 31 March 2014
FY15	Full Year ended 31 March 2015
FY16	Full Year ended 31 March 2016
FY17	Full Year ended 31 March 2017
FY18	Full Year ending31 March 2018
GIB	Green Investment Bank
HQLA	HighlyQualityLiquid Assets
IPO	Initial Public Offering
IRB	Internal Ratings-Based
IT	Information Technology
JV	Joint Venture
LBO	Leveraged Buyout
LCR	LiquidityCoverage Ratio

LNG	Liquefied Natural Gas
LP	Limited Partner
Ltd	Limited
M&A	Mergers and Acquisitions
MacCap	Macquarie Capital
MACS	Macquarie Additional Capital Securities
MAM	Macquarie Asset Management
MBL	Macquarie Bank Limited
MD&A	Management Discussion & Analysis
MEC	Metals and EnergyCapital
MEIF1	Macquarie European Infrastructure Fund 1
MEREP	Macquarie GroupEmployee Retained EquityPlan
MGL / MQG	Macquarie GroupLimited
MKIF	Macquarie Korea Infrastructure Fund
MIC	Macquarie Infrastructure Corporation
MIDIS	Macquarie Infrastructure Debt Investment Solutions
MIM	Macquarie Investment Management
MIRA	Macquarie Infrastructure and Real Assets
MPW	Macquarie Private Wealth
MQA	Macquarie Atlas Roads

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41

Macquarie Group Limited  2017 Annual General Meeting  macquarie.com

FY17 Overview

Overview of the result

1Q18 Update

FY18 Outlook

Appendices

Glossary

MSIS	Macquarie Specialised Investment Solutions
MSG	Macquarie Securities Group
MW	Mega Watt
NGLs	Naturalgas liquids
NIM	Net Interest Margin
No.	Number
NPAT	Net Profit After Tax
NPC	Net Profit Contribution
NSFR	Net Stable FundingRatio
OTC	Over-The-Counter
P&L	Profit and Loss Statement
PCP	Prior CorrespondingPeriod
PPE	Property,Plant and Equipment
PPP	Public Private Partnership
RBA	Reserve Bank of Australia
REIT	Real Estate Investment Trust
ROE	Return on Equity
RWA	Risk Weighted Assets
SBI	State Bank of India
ST	Short-term

TMET	Telecommunications,Media,Entertainment and Technology
TSR	Total Shareholder Return
UK	United Kingdom
US	United States of America
VaR	Value at Risk
VWAP	Volume Weighted Average Price
yr	Year

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Macquarie Group Limited 2017 Annual General Meeting

27 July 2017