Macquarie Group Limited - AGM Information 2019

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Macquarie Group Limited 2019 Annual General Meeting

25 July 2019

Glossary

Formal Business

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FY19 Highlights

Overview of FY19

1Q20 Update

FY20 Outlook

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 year ended 31 March 2019.

Certain financial information in this presentation is prepared on a different basis to the Financial Report within the Macquarie Group Annual Financial Report (“the Financial Report”) for the year ended 31 March 2019, 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. Numbers are subject to rounding and may not fully reconcile.

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Agenda

FY19 Highlights 01

Overview of FY19 02

1Q20 Update 03

FY20 Outlook 04

Formal Business 05

Glossary 06

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FY19 Highlights Peter Warne Chairman

Overview of FY19

1Q20 Update

FY20 Outlook

Formal Business Glossary

FY19 Highlights

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Financial performance

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Overview of FY19

1Q20 Update FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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FY19 dividend

2H19 ORDINARY DIVIDEND FROM $A3.60 $A2.15 (45% franked) (45% franked) IN 1H19

FY19 ANNUAL PAYOUT RATIO 66%

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FROM
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FY19 ORDINARY DIVIDEND FROM $A5.75 $A5.25 (45% franked)

(45% franked) IN FY18

DIVIDEND POLICY REMAINS 60-80% annual payout ratio

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Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Board changes

PHILIP COFFEY

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Effective 28 August 2018, Philip Coffey joined the Boards of Macquarie Group Limited and Macquarie Bank Limited as an independent director
Mr Coffey has extensive international experience in financial services and financial markets and most recently served as Deputy CEO of Westpac Banking Corporation Limited between 2014 and 2017. Prior to this role, Mr Coffey held a number of executive positions at Westpac including Chief Financial Officer and Group Executive, Westpac Institutional Bank
He has successfully led operations based in Australia, New Zealand, the United States and the United Kingdom and Asia and has extensive experience in financial markets, funds management, balance sheet management and risk management. He began his career at the Reserve Bank of Australia and has also held executive positions at AIDC Limited and Citigroup
Mr Coffey is a Non-Executive Director of both Lendlease Corporation Limited and the Clean Energy Finance Corporation

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JILLIAN BROADBENT AO

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Effective 5 November 2018, Jillian Broadbent joined the Boards of Macquarie Group Limited and Macquarie Bank Limited as an independent director
Ms Broadbent is the Chair of Swiss Re Life and Health Australia Limited, Chancellor of the University of Wollongong and a director of Woolworths Group Limited, the National Portrait Gallery of Australia and the Sydney Dance Company
Ms Broadbent was a Member of the Reserve Bank of Australia Board between 1998 and 2013 after 22 years at Bankers Trust Australia as an economic strategist and then as executive director responsible for risk management of foreign exchange, interest rates and commodities
She has previously served as Chair of the Board of Clean Energy Finance Corporation and as a director of ASX Limited, Special Broadcasting Service Corporation, Coca-Cola Amatil Limited, Woodside Petroleum Ltd, Qantas Airways Limited and Westfield Management Limited

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Risk culture and conduct

Increased engagement with regulators around the world during FY19 with specific focus on conduct through the Banking Royal Commission in Australia

Macquarie’s long-established risk culture and our management of conduct risk is well entrenched across all parts of the organisation. Key aspects include:
Primary responsibility resides at the individual and business unit level
Strong independent oversight by the Risk Management Group
Independent and objective risk-based assurance by Internal Audit
Macquarie’s unbroken profitability is underpinned by our approach to risk culture as reflected in our principles of Opportunity, Accountability and Integrity
The Board, supported by monitoring of detailed metrics, plays a key oversight role in ensuring that the Macquarie culture supports our risk appetite
APRA’s request to review governance, culture and accountability was completed:
Review confirmed these factors remain critical to our success and are well embedded
Identified opportunities to further improve our non-financial risk management
Macquarie’s remuneration framework and consequence management process is designed to promote accountability, encourage and reward appropriate behaviours and discourage inappropriate behaviours
During the year, there were 163 matters involving conduct/policy breaches which resulted in formal consequences. Of these, 23 matters resulted in termination of employment and 140 resulted in a formal warning. In 34 of the 140 matters where a formal warning was issued, the individual subsequently left Macquarie. These matters were considered to be isolated issues with no evidence of broader systemic conduct issues

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

Formal Business

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Risk culture and conduct in practice

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Operating and Support Groups, Risk Management Group (RMG), Integrity Office and Human Resources work together to maintain our strong risk culture and conduct

Recent risk culture and conduct specific initiatives

Continued roll out of the Executive Director Leadership Program to our Senior Leaders; content includes emphasis on the importance of creating inclusive working environments and their positive impact on risk culture.

Refreshed our Conduct Risk Program, including an enhanced Conduct Risk definition.

Global training program rolled out to over 250 operational risk, compliance and chief operating officer staff to strengthen capability in identifying conduct risk and risk culture. Further training for supervisors underway.

Behavioural Risk Division formed to further enhance oversight of risk culture, group-wide conduct risk program, work health and safety, and environmental and social risk.

Enhanced oversight of the Board Governance and Compliance Committee to include specific oversight of the Conduct Risk Management Framework and customer outcomes.

The Integrity Office

Established in 1998 as an internally independent function to allow staff to speak up safely about misconduct, illegal or unethical behaviour or breaches of the Code of Conduct

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Runs the Whistleblower Program and conducts or oversees impartial investigations into concerns that are raised
During FY19, the Integrity Office refreshed the Code of Conduct and continued to roll out its awareness program, engaging 3,400 staff across 20 offices globally on:
What We Stand For
sound decision making principles
inclusive working environments and leadership
maintaining a speak-up culture; and
whistleblowing.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Environmental, Social and Governance (ESG)

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Macquarie’s ESG commitment reflects our responsibility to clients, shareholders, communities, our people and the environment in which we operate

ESG Scope

Building on our principles of opportunity, accountability and integrity, Macquarie’s ESG approach is structured around focus areas which reflect the risks and opportunities identified by the business and the issues of interest to our stakeholders

Social

Environment

Investing in social infrastructure
Investing in sustainability solutions and supporting the global energy transition
• Actively managing environmental risks including climate change risks
Actively managing social risks including human rights and modern slavery risk
• Providing a diverse, inclusive workplace • Improving work health and safety performance across Macquarie and Macquarie-managed assets
Engaging in climate leadership initiatives such as GCA and CFLI[1]
Supporting TCFD, UN PRI and other external ESG standards[2]
Engaging Macquarie and its staff in the wider community
Promoting sustainable workplaces

Environmental and Social Risk policy

Governance

Strong corporate governance
• Ethical conduct by staff
Customer advocacy
Whistleblowing
Anti bribery and anti corruption
• Anti money laundering • Managing conflicts of interest • Cyber security and data privacy • Dealing with 3rd parties and suppliers
Reporting transparently

FY19 Highlights

22GW+ of renewable Inaugural £500m green loan to energy assets in finance renewable energy, operation and under energy efficiency, waste development or management, green buildings construction and clean transportation projects

~100m people 50/50 representation Over 4,000 450+ transactions and Top 3 rating utilise Macquarieof males and females classroom events and relationships assessed for Australian ESG managed in Macquarie’s Intern 300,000 online courses under our Environmental research by essential services and Graduate and knowledge tests and Social Risk Policy Australian daily programs delivered to our staff Institutional Investors

GCA: Global Commission on Adaptation; CFLI: Climate Finance Leadership Initiative. 2. TCFD: Taskforce on Climate-related Financial Disclosures; UN PRI: United Nations Principles for Responsible Investment.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

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Actively supporting our clients and communities in the global energy transition: Focused on driving solutions across all sources of emissions

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Acquisition [1] of a Created JV with UK
Invested [1] in 320MW+ portfolio leading US / UK Government to deploy
of construction and operation waste-to-energy £200m in developing Acquired Conergy
stage Mexican solar farms platform market clean energy team of 90 solar
specialists
natural gas ~13b cubic feet of each daytraded used In the UK, supporting commercial use of electric vehicle first unlisted renewables ‘yieldco’ Helped establishfor international [1] India’s Developed through to sale in 2018 Quadrant Energy
Funding combined cycle gas lithium battery packs investors
plant in Mexico to power Developed CEFC/CSIRO partnership on
500k+ homes Inaugural £500m PPA-backed agricultural energy efficiency
green loan 650MW onshore Delivering Australia’s first and emissions reduction
Acquired US 6GW solar wind in Sweden thermal waste-to-energy Developed 6.5MWh South
and storage pipeline facility, which will reduce Korea storage system
CO2 emissions annually by connected to solar
400k tonnes
US partnership to target
creation of over 1GW of Developing 500MW+
new solar capacity offshore wind in Taiwan
Reducing ewaste
through nu mobile
in Australia
Arranged financing and an
innovative commercial structure for
228MW wind farm in Australia
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Undertaken by Macquarie-managed funds.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Macquarie Group Foundation

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A record year of giving to the communities in which we live and work

FY19 $A31.7m donated by staff and Foundation

53,000 hours volunteered

1,600+ community organisations supported

More than $A360m+

contributed since 1985

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Macquarie Sports

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Macquarie Group Collection

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Grant-making focus area

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My Community – Staff Giving Platform

Glossary

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FY19 Highlights Overview of FY19 1Q20 Update FY20 Outlook

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02 Overview of FY19

Shemara Wikramanayake Managing Director and Chief Executive Officer

Overview of FY19

1Q20 Update

FY20 Outlook

Formal Business Glossary

FY19 Highlights

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50 years of unbroken profitability

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Total Earnings Dividends MSCI World MSCI
$Ab Performance(ASX: MQG) shareholder return (TSR) [1] per share CAGR per share CAGR ASX 20 [2] Diversified Financials [2] Capital Markets [2] World Banks [2] $A2,982m %
3.0 FY19 profit
Since listing 7,202% 12% 13% 2nd 1st 1st 1st 7,000
2.5 5 year 199% 25% 17% 2nd 3rd 4th 1st
6,000
2.0 5,000
4,000
1.5
3,000
1.0
2,000
0.5
1,000
0.0 0
MQG All Ordinaries Index
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Historical figures converted at FY19 average FX rate for comparative purposes. The All Ordinaries Accumulation Index (All Ordinaries Index) comprises the 500 largest ASX listed companies by market capitalisation. Macquarie TSR calculations assume continuous listing. 1. At 31 March 2019. 2. Ranking refers to TSR against the respective index constituents that have been continuously listed since Macquarie’s inclusion. Source: Bloomberg. Data to 31 March 2019.

Overview of FY19

1Q20 Update

FY20 Outlook

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FY19 Highlights

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Diversification by region

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Asia
International income 66% of total income [[1]]
Staff
[[2]] 15,715, International staff 58% of total
9% 3,746
of total income Income
EMEA $A1,138m
Staff
Assets under management
2,407
$A60.2b
Americas of total income 28% Income $A3,472m employing ASIA 39,000+ Manila people [4]
Bangkok Mumbai
Staff Beijing Seoul
Assets under management GurugramHong Kong ShanghaiSingapore
2,889 Hsin-Chu Taipei
of total income 29% Income $A107.5b employing 50,000+ people [4] Australia [3] JakartaKuala Lumpur Tokyo
$A3,707m Staff
EUROPE MIDDLE EAST
Amsterdam Abu Dhabi 6,673
BraintreeDublin Dubai 34% Income
Assets under management Edinburgh SOUTH AFRICA of total income
Frankfurt Cape Town
$A275.5b GenevaLondon Johannesburg $A4,235m
employing 32,000+ people [4] Luxembourg
MadridMunich Assets under management
CANADA USA Nashville Paris
Calgary Austin New York Reading $A108.1b
MontrealToronto BostonChicago OrlandoPhiladelphia ViennaZurich employing 8,000+ people [4]
Vancouver Denver San Diego
Houston San Francisco AUSTRALIA Newcastle
LATIN AMERICA Jacksonville San Jose Adelaide Parramatta
Mexico City Los Angeles Brisbane Perth
Sao Paulo Minneapolis Canberra Sydney
Santiago Gold Coast
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International income 66% of total income[[1]] Total staff[[2]] 15,715, International staff 58% of total

AUSTRALIA Newcastle Adelaide Parramatta Brisbane Perth Canberra Sydney Gold Coast Manly NEW ZEALAND Melbourne Auckland

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Net operating income excluding earnings on capital and other corporate items. 2. Includes staff employed in certain operationally segregated subsidiaries throughout the presentation 3. Includes New Zealand. 4. Includes staff employed at MIRA-managed fund assets and assets Macquarie Capital has invested in.

Overview of FY19

1Q20 Update

FY20 Outlook

Formal Business Glossary

FY19 Highlights

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FY19 net profit contribution from Operating Groups

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$A6,145m up 21% on FY18

Annuity-style businesses

$A3,287m

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4% ON FY18
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Markets-facing businesses

$A2,858m 76% ON FY18

MAM: on FY18

Increased base fees, offset by higher operating expenses and lower combined performance fees and investment-related income

CAF: on FY18

Higher Asset Finance portfolio income more than offset by one-off investment-related income in the prior year and legacy lending transaction-related expenses; higher investment-related income in Principal Finance, offset by lower interest income from the loan portfolio; reduced provisions and impairments in the prior year

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FY19
Net profit
contribution
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CGM: on FY18

Strong performance in commodities and improved results in foreign exchange, interest rates and credit, partially offset by challenging market conditions in cash equities, increased impairments and operating expenses

Macquarie Capital: on FY18

Higher investment-related income due to asset realisations and increased fee and commission income, partially offset by higher net credit and other impairment charges and increased expenditure on green energy and other projects in the development phase

BFS: on FY18

Growth in Australian loan portfolio, BFS deposits and funds on platform, partially offset by a decline in the Australian vehicle finance portfolio and increased costs associated with investment in technology

During FY19, certain businesses were reorganised between Operating Groups to better align businesses with a shared focus on particular customer segments and geographies. This included the transfer of Macquarie’s Australian vehicle finance business from CAF into BFS, the MSIS business from MAM to CAF and Macquarie Capital’s global real estate business into MAM to merge with MIRA Real Estate. These changes were announced as part of Macquarie’s 1H19 results on 2 November 2018. Comparatives were restated to reflect this reorganisation between Operating Groups. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY19 net profit contribution from Operating Groups.

Overview of FY19

1Q20 Update FY20 Outlook Formal Business Glossary

FY19 Highlights

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Macquarie Asset Management

Actively manages funds for investors across multiple asset classes

MIRA

MIM

FY19 Net profit contribution $A1,503m

4% on FY18

150+ 1,700+ 18 infrastructure people markets and real assets[1]

Net profit contribution

$A542.7b assets under management

24%

8% on FY18

36% $A116.9b on FY18 $A18.9b Equity under management Equity raised

$A361.0b

Assets under management

$A10.9b Equity deployed[2]

~80%

$A26.8b Real Estate AUM

of all assets under management outperforming respective benchmarks on a three-year basis

$A25.5b Equity to deploy

In December 2018, appointed as investment manager of The Infrastructure Fund

In April 2019, agreed to acquire the assets related to the mutual fund business of Foresters Investment Management Company, Inc.

TOP 10 Barron’s Fund Families #1 Top 75 Infrastructure Korea M&A Deal of the Year – Telecom M&A Deal of the Investment Manager of 10-year relative Investment Manager[3] Acquisition of ADT Caps[4] Year 2018 – Acquisition of TDC[5] the Year, 2019 – MIM[6] performance[7]

Excludes real estate assets. 2. Excludes GLL and Macquarie Capital real estate business. 3. IPE Real Assets (July/August 2019), measured by infrastructure assets under management. 4. The Asset Country Awards 2018, Best Deals – North Asia. 5. TMT Finance M&A Awards 2018. 6. 2019 Investment Manager of the Year in Australia by the Financial Standard Investment Leadership Awards. 7. Delaware Funds® by Macquarie family of funds ranked 38 out of 57 for the one-year; 23 out of 55 for the five-year; and 5 out of 49 for the 10-year (2018).

Overview of FY19

1Q20 Update

FY20 Outlook Formal Business Glossary

FY19 Highlights

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Corporate and Asset Finance

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Finances the assets people use every day

FY19 Net profit contribution $A1,028m

10% on FY18

860+ 14 people markets

Net profit contribution $A21.3b 17% asset and loan portfolio

Asset Finance portfolio

of new loans being written for ship financing

Continued growth in mobile device programs with over 1.2m devices financed

Principal Finance Transportation portfolio Finance portfolio

Sale of majority stake in Energetics

of a 120 rotorcraft portfolio from Waypoint Leasing

of 50% interest in a portfolio of multifamily rental properties and development pipeline in the US

FY19 Highlights Overview of FY19

1Q20 Update FY20 Outlook

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Banking and Financial Services

Macquarie’s retail banking and financial services business

FY19 Net profit contribution $A756m

3% on FY18

2,770+ Personal Business People Banking Banking Wealth Management Leasing

Net profit contribution More than 1.5m 12% Australian clients

$A38.5b on Mar 1818% Australian mortgage portfolio

$A8.2b on Mar 1812% Business banking loan portfolio

4% $A86.0b on Mar 18 Funds on platform[1]

17% $A53.4b on Mar 18 Total BFS deposits[2]

5% on Mar 18

$A27.2b CMA deposits

5% $A15.2b on Mar 18 Australian vehicle finance portfolio[3]

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FY19 Highlights Overview of FY19

1Q20 Update

FY20 Outlook Formal Business Glossary

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Commodities and Global Markets

Provides clients with access to markets, financing, financial hedging, research and market analysis and physical execution

FY19 Net profit contribution

65% on FY18

$A1,505m

2,300+ 25+ 160+ people market segments products

Net profit contribution

No. 2 25% Physical gas marketer in North America[1]

Commodity Markets & Finance

Cash Equities and Equity Derivatives & Trading

Strong results across the commodities platform particularly from North American Gas and Power, Global Oil and EMEA Gas and Power

Impacted by challenging market conditions and reduced opportunities

Fixed Income & Currencies

Futures

Increased sales and hedging activity in foreign exchange across all regions

Primarily driven by increased contribution from the US and continued strength in Australia due to client activity

Credit Markets

Increase due to continued growth from settlement financing activity with clients engaged in the US corporate direct lending market

	FY19	AWARDS	No. 1 North America Power Dealer of the Year2	2nd overall for Research in 2018 Peter Lee survey of Australian institutional investors	No. 2 in Australian and New Zealand ECM3	No. 1 Futures broker on the ASX4	2018 Derivatives House of the Year – Energy5

FY19 Highlights Overview of FY19

1Q20 Update

FY20 Outlook Formal Business Glossary

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Macquarie Capital

Advises and invests alongside clients and partners to realise opportunity ; develops and invests in infrastructure and energy projects

FY19 Net profit contribution 89% on FY18 $A1,353m

1,370+ 16 $A2.4b people[1] markets capital invested[2]

$A1.5b Investments realised in FY19[4]

$A1.5b New investments in FY19[4]

90+ green energy projects under development or construction

Total revenue on FY18

Notable deals included:

Financial adviser to Wesfarmers Limited in relation to the ~$A19b demerger of Coles Group Limited, the largest spin-off in ASX history[5]
Exclusive financial adviser to KKR on its acquisition of BMC Software and joint bookrunner and joint lead arranger on the supporting $US6.6b financing
Co-developer, financial adviser and equity investor for the ~$A700m Kwinana Waste-toEnergy Project, the first of its kind in Australia

Net profit contribution $A478b 22% completed deals in FY19[3]

Realisations of Macquarie’s interests in Quadrant Energy and PEXA

Most Innovative Infrastructure and Project Investment Finance Europe Deal of World’s Best Investment Asia-Pacific Clean Asia-Pacific Renewables Bank for Infrastructure the Year[6] Bank in Infrastructure Energy Deal of the Year Deal of the year and Project Finance[6] Markbygden Ett Wind Farm Sector[7] Kwinana[8] Formosa 1[8]

Note: References relate to the full year ended 31 March 2019. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY19 net profit contribution from operating groups. 1. Includes certain staff employed in operationally segregated subsidiaries. 2. Regulatory capital utilised across the MacCap balance sheet. 3. Dealogic and IJGlobal for Macquarie Group completed M&A, investments, ECM and DCM transactions converted as at the relevant report date. Deal values reflect the full transaction value and not an attributed value. 4. Regulatory capital realised and invested during FY19. 5. Refinitiv (1 Apr ‘87 –14 Jan ‘19, by “spin-off”). 6. The Banker (2018). 7. Global Finance Awards (2019). 8. PFI (2018).

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Approximate business Basel III Capital and ROE

As at 31 March 2019

Operating Group	APRA Basel III Capital 1 @ 8.5% ($Ab)	Approx. FY19 Return on Ordinary Equity2	Approx. 13-Year Average Return on Ordinary Equity 2
Annuity-style businesses	9.2
Macquarie Asset Management	2.1	22%	22%3
Corporate and Asset Finance	3.0
Banking and Financial Services	4.0
Markets-facing businesses	5.9
Commodities and Global Markets	3.5	23%	16%
Macquarie Capital	2.4
Corporate	0.6
Total regulatory capital requirement @ 8.5%	15.7
Group surplus	6.1
Total APRA Basel III capital supply	21.84

Note: Differences in totals due to rounding. 1. Business Group capital allocations are based on 31 Dec 18 allocations adjusted for material movements over the Mar 19 quarter. 2. NPAT used in the calculation of approx. FY19 ROE is based on Operating Groups’ 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 which are based on the quarterly average capital usage from FY18 to FY19, inclusive. 13-year average covers FY07 to FY19, inclusive. 3. CAF returns prior to FY11 excluded from 13-year average as not meaningful given the significant increase in scale of CAF’s platform over this period. 4. Comprising of $A17.8b of ordinary equity and $A4.0b of hybrids.

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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 2019 31 March 2019 31 March 2019
$Ab
140
Short-term1
120 Cash, liquids and
self-securitised
assets3
100
Customer
deposits
80
Trading and
Short-term4
60
28 years 23 years 27 years
$A6.1b
40
Term 2 Term5
20
‘A’ RATED
-
Funding sources Funded assets
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The funded balance sheet is a representation of Macquarie’s net funding requirements, and therefore differs from the statutory balance sheet by excluding certain items such as non-recourse self-funded assets and certain accounting gross-ups. 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 subordinated debt, equity and hybrids. 3. ‘Cash, liquids and self securitised assets’ includes self securitisation of repo eligible Australian assets 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. Based on materiality, the 8.5% used to calculate the Group capital surplus does not include the countercyclical capital buffer (CCyB) of ~10bps. The individual CCyB varies by jurisdiction and the Bank Group’s CCyB is calculated as a weighted average based on exposures in different jurisdictions.

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03 1Q20 Update

Shemara Wikramanayake Managing Director and Chief Executive Officer

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

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1Q20 Overview

Satisfactory trading conditions with 1Q20 operating group contribution broadly in line with the prior corresponding period (pcp) (1Q19) and slightly down on the prior period (4Q19)
Macquarie’s annuity-style businesses’ (MAM, CAF and BFS) combined 1Q20 net profit contribution[1] down on pcp mainly due to: timing of performance fees and higher operating expenses following FY19 platform acquisitions in MAM; reduced loan volumes and realisations in CAF Principal Finance; BFS broadly in line
Macquarie’s markets-facing businesses’ (CGM and MacCap) combined 1Q20 net profit contribution[1] up on pcp primarily due to: strong performance of the commodities platform in CGM, partially offset by lower investment–related income in MacCap

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

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

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1Q20

Overview

Annuity-style businesses

Macquarie Asset Management

24[%]

FY19 contribution[1]

AUM of $A552.7b at June 19, up 2% on March 19 predominately driven by market movements
MIM: $A368.1b in AUM, up 2% on March 19, predominately driven by market movements and FX; awarded $A4.8b in new, funded institutional mandates and contributions
MIRA: $A120.2b in EUM[2] , up 3% on March 19; $A2.4b in new equity raised in 1Q20 including $A2.3b in Europe; $A1.8b of equity invested; $A5.9b of asset divestments; and $A24.2b of equity to deploy at June 19
Macquarie European Infrastructure Fund 6 closed at hard cap of €6b exceeding its initial target of €5b

Corporate and Asset Finance

17% FY19 contribution[1]

Asset Finance and Principal Finance portfolio of $A21.5b at June 19, broadly in line with March 19
Asset Finance originations in line with expectations
Notable transactions for Asset Finance include the launch of nu mobile in Australia to provide a low cost option to customers utilising pre-owned mobile phones and the arrangement and distribution of USD debt to finance the construction of four shuttle tankers
Notable transactions for Principal Finance include an offer to acquire Premier Technical Services Group PLC, a provider of tech-enabled specialist testing and compliance services, providing financing for the acquisition of a leading NZ online classifieds business and providing financing to a European deep sea terminals operator

Banking and Financial Services

12%

FY19 contribution[1]

Total BFS deposits[3] of $A53.1b at June 19, down 1% on March 19
Australian mortgage portfolio of $A39.7b at June 19, up 3% on March 19
Funds on platform[4 ] of $A88.8b at June 19, up 3% on March 19
Business banking loan portfolio of $A8.3b at June 19, up 1% on March 19
Australian vehicle finance portfolio of $A15.0b at June 19, down 1% on March 19
Entered into agreement for sale of 25% of Macquarie AirFinance to Dutch pension fund adviser and manager PGGM
Completion of the acquisition of a 120 rotorcraft portfolio from Waypoint Leasing (Ireland) Ltd
Based on FY19 net profit contribution from operating groups as reported on 3 May 19. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. 2. MIRA’s total EUM includes market capitalisation at measurement date for listed funds, the sum of original committed capital less capital subsequently returned for unlisted funds and mandates as well as invested capital for managed businesses. 3. BFS deposits exclude corporate/wholesale deposits. 4. Funds on platform includes Macquarie Wrap and Vision.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

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1Q20

Overview

Markets-facing businesses

Commodities and Global Markets

25[%]

FY19 contribution[1]

Strong contribution from client hedging and trading opportunities across the commodities platform, particularly from Global Oil, North American Gas & Power and EMEA Gas & Power
Continued customer activity in foreign exchange across all regions
Ongoing strength in ANZ and US Futures driven by customer activity
Cash Equities continued to be impacted by challenging market conditions
Maintained ranking as No. 2 physical gas marketer in North America[2]
Awarded 2019 Natural Gas/LNG House of the Year[3]
Awarded 2019 Research House of the Year[3]

Macquarie Capital

22%

FY19 contribution[1]

87 transactions valued at $A92b[4] completed globally, down on a strong pcp and up on the prior period
Fee revenue up on pcp due to higher fee revenue from M&A and DCM
Investment-related income down predominantly due to lower revenue from asset realisations
Green Investment Group acquired a 43 MW Swedish onshore wind farm from Nordic wind developer OX2 after structuring and securing a long-term Power Purchase Agreement (PPA) for the project with Axpo Nordic. With this PPA, GIG has now sourced and structured PPAs for almost 1GW of onshore wind capacity in the Nordic region. GIG also continued to recycle capital into renewables projects globally, across technologies including solar, waste-to-energy and battery storage
Other notable Principal transactions included: investment in Dovel Technologies, a leading technology solutions provider to federal agencies that blends deep domain expertise and advanced technologies in the health IT, life sciences, and grants management markets
Advisory Excellence Award - Sydney Metro Martin Place Integrated Station Development[5]
Financial Excellence Award – Westconnex[5]
No. 1 in ANZ for completed M&A[6]
Based on FY19 net profit contribution from operating groups. Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. 2. Platts Q1 CY19. 3. 2019 Energy Risk Awards. 4. Dealogic and IJGlobal for Macquarie Group completed M&A, investments, ECM and DCM transactions converted as at the relevant report date. Deal values reflect the full transaction value and not an attributed value. 5. Infrastructure Partnership Australia (2019). 6. Dealogic 1 January - 30 June 2019 (by volume).

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Funded balance sheet remains strong

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Term liabilities exceed term assets

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31 March 2018 31 March 2019 30 June 2019
$Ab $Ab $Ab
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$Ab
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These charts represent Macquarie’s funded balance sheets at the respective dates noted above. The funded balance sheet is a representation of Macquarie’s net funding requirements, and therefore differs from the statutory balance sheet by excluding certain items such as non-recourse self-funded assets and certain accounting gross-ups. 1. ‘Other debt maturing in the next 12 months’ includes Structured Notes, Secured Funding, Bonds, Other Loans, Subordinated debt maturing within the next 12 months and Net Trade Creditors. 2. ‘Debt maturing beyond 12 months’ includes Subordinated debt not maturing within next 12 months. 3. Non-controlling interests netted down in ‘Equity and hybrids’ and ‘Equity investments and PPE’ and ‘Loan assets (incl. op leases) > 1 year. 4. Hybrid instruments include Macquarie Income Securities, Macquarie Additional Capital Securities, Macquarie Capital Notes 2, 3 & 4 and Macquarie Bank Capital Notes. 5. ‘Cash, liquids and self-securitised assets’ includes self-securitisation of repo eligible Australian assets originated by Macquarie. 6. ‘Loan Assets (incl. op lease) < 1 year’ includes Net Trade Debtors. 7. ‘Loan Assets (incl. op lease) > 1 year’ includes Debt Investment Securities. 8. ‘Equity investments and PPE’ includes Macquarie’s co-investments in Macquarie-managed funds and equity investments.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Basel III capital position

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APRA Basel III Group capital at Jun 19 of $A20.8b; Group capital surplus of $A5.0b[1,2]
APRA Basel III CET1 ratio: 12.0%[3] ; Harmonised Basel III CET1 ratio: 14.9%[3,4]
APRA implemented SA-CCR[5] on 1 Jul 19. Estimated pro forma 1 Jul position: APRA Basel III CET1 ratio 11.1%; Group capital surplus $A4.4b
$Ab

Group regulatory surplus : Basel III (Jun-19)

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Based on 8.5%
(minimum Tier 1
ratio + CCB)
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Calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110. 2. Based on materiality, the 8.5% used to calculate the Group capital surplus does not include the countercyclical capital buffer (CCyB) of ~12bps. The individual CCyB varies by jurisdiction and the Bank Group’s CCyB is calculated as a weighted average based on exposures in different jurisdictions. 3. Basel III applies only to the Bank Group and not the Non-Bank Group. 4. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework. 5. APRA implemented the standardised approach for measuring counterparty credit risk exposures (SA-CCR) on 1 Jul 19. Note that SA-CCR has not yet been implemented in many jurisdictions, including US and EU. 6. Includes current quarter P&L, movement in the foreign currency translation reserve and other movements in capital supply including AASB16 impact to retained earnings. 7. From 1 Jul 19, APRA Basell III surplus will be reduced by an estimated A$0.6b due to SA-CCR proforma impact. 8. 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 differences in the treatment of mortgages $A0.8b; capitalised expenses $A0.4b; equity investments $A0.3b; investment into deconsolidated subsidiaries $A0.2b; DTAs and other impacts $A0.2b.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

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Capital management update

Macquarie Group Employee Retained Equity Dividend Reinvestment Plan (DRP) Plan (MEREP)

     - No discount applied for the 2H19 DRP and the 2H19 shares were acquired on-market

A total of approximately $A607m of Macquarie ordinary shares were purchased:
$A326m off-market under arrangements announced to the market on 3 May 2019; and
- $A281m on-market.
The shares were acquired at a weighted average purchase price of $A122.37 per share[1 ]

Trades were crossed off-market by Macquarie Securities (Australia) Limited and reported to ASX and Chi-X accordingly.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Business growth

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Business capital requirements[1]

$Ab

$A0.5b business growth

over FY19 (excl. Corporate)

$A0.3b business growth over 1Q20 (excl. Corporate)

1Q20 key drivers

CAF

Primarily driven by Principal Finance equity investments

BFS

Increase in mortgages and business banking loan portfolios, partially offset by decrease in the vehicle finance portfolio

MacCap

$A0.9b total increase over FY19

$A0.1b total increase

over 1Q20

Asset realisations and a reduction in DCM activity net of $A0.3b of equity investments

Corporate

Reduction in deferred tax asset position

Regulatory capital requirements are calculated at 8.5% RWA including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110. Operating Group capital allocations for Jun 19 are based on 31 Mar 19 allocations adjusted for material movements over the Jun 19 quarter.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Strong regulatory ratios

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Bank Group (Jun 19)

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17.5% 7.5% 190.0% 115.0%
14.9%
6.0%
14.0% 6.0% 160.0% 166% 110.0% 111%
5.4%
12.0%
10.5% 4.5% 130.0% 105.0%
7.0% 3.0% 100.0% 100.0%
3.5% 1.5% 70.0% 95.0%
- - 40.0% 90.0%
CET1 ratio Leverage ratio LCR 1,2 NSFR 2
Bank Group (Harmonised [3] ) Bank Group (APRA) Basel III minimum [4,5]
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Average LCR for Jun 19 quarter is based on an average of daily observations. 2. Calculated on a pro forma basis reflecting current contractual arrangements, following the removal of the Material Adverse Change (MAC) clause in the master loan agreement between MGL and MBL. 3. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework. 4. Includes the capital conservation buffer in the minimum CET1 ratio requirement. In Nov 18, APRA released a draft update to 'Prudential Standard APS 110 Capital Adequacy' proposing a minimum requirement for the leverage ratio of 3.5% effective Jan 22. 5. Based on materiality, the countercyclical capital buffer (CCyB) of ~12bps has not been included.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Regulatory update

APRA is currently undertaking regulatory reviews in a number of areas, including:
Finalisation of Basel III - APRA is yet to release final standards for Australian banks to ensure that their capital levels can be considered ‘unquestionably strong’[1]
- In Jun 19, APRA responded to the first phase of consultation on revisions to the capital framework[2] , and released draft updated standards for residential mortgages, credit risk and operational risk requirements under the standardised approaches
In Jul 19, APRA implemented the standardised approach for measuring counterparty credit risk exposures (SA-CCR)[3]
- The estimated pro forma impact on MBL’s CET1 ratio is expected to be ~90bps
In Jul 18, APRA released a discussion paper proposing changes to the related entities framework (APS 222), with implementation from 1 Jan 20, plus any transition granted by APRA[4]
In Aug 18, APRA released a discussion paper setting out potential options to improve the transparency, international comparability and flexibility of the capital framework. The proposals are not intended to change the amount of capital that ADIs are required to hold[5]
In Nov 18, APRA released draft prudential standards on its implementation of a minimum requirement for the leverage ratio of 3.5% expected to be effective from Jan 22[6] . MBL’s leverage ratio is 5.4% at 30 Jun 19
Loss-absorbing capacity (LAC) - APRA released a ‘response to submissions’ paper in Jul 19 outlining its approach for LAC to support the orderly resolution of Australian ADIs[7]
- MBL expects to be subject to additional LAC requirements, in line with the major banks, with the final quantum of LAC to be determined by APRA as part of the resolution planning process
APRA intends to consult on a framework for recovery and resolution in 2019, which will include further details on resolution planning
In Jan 19, the Basel Committee on Banking Supervision (BCBS) released revisions to the market risk framework[8] , with implementation from 1 Jan 22. APRA is yet to release draft standards
Based on the current information available, it is Macquarie’s expectation that it will have sufficient capital to accommodate likely additional regulatory Tier 1 capital requirements as a result of the above changes, noting that some of them are at an early stage of review and hence the final impact is uncertain

‘Revisions to the capital framework for ADIs’; 14 Feb 18. 2. ‘APRA responds to first phase of consultation on revisions to ADI capital framework’; 17 Jun 19. 3. ‘Prudential Standard APS 112 Capital Adequacy: Standardised approach to credit risk’; 23 Apr 18. 4. ‘APRA proposes updates to related parties framework for ADIs’; 2 Jul 18. 5. ‘Improving the transparency, comparability and flexibility of the ADI capital framework’; 14 Aug 18. 6. ‘Draft Prudential Standard APS 110 Capital Adequacy’ and ‘Response to submissions: Leverage ratio requirement for ADIs’; 27 Nov 18. 7. ‘Increasing the loss-absorbing capacity of ADIs to support orderly resolution’; 8 Nov 18. 8. ‘Minimum capital requirements for market risk’; 14 Jan 19.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Regulatory update

Regulatory update (cont’d)

The Banking Executive Accountability Regime (BEAR) applied to Macquarie from 1 July 2019. To ensure full compliance, the vesting period of PSUs awarded from FY2020 have been extended to four years, subject to performance hurdles
In July 19, APRA released a draft prudential standard CPS 511 aimed at clarifying and strengthening remuneration requirements in APRA-regulated entities. A three-month consultation period will close on 23 October 2019. APRA intends to release the final prudential standard before the end of 2019, with a view to it taking effect in 2021 following appropriate transitional arrangements.
In July 19, APRA published a ‘frequently asked questions’ (FAQs)[1] to provide further information to assist regulated entities in the interpretation of Prudential Standard APS 210 (Liquidity). As previously announced[2] , Macquarie has removed a material adverse change (MAC) clause from its master loan agreement between MGL and MBL to ensure there will be no impact on MBL’s LCR calculation going forward

Brexit

As previously stated, Macquarie does not believe that the UK’s withdrawal from the European Union (EU) will be a material event for the Group
Progress on licence applications to supplement existing EU licences is well advanced with three of the four targeted new licences now in place
Macquarie is subject to an application process for a credit institution licence in Ireland that is expected to be issued in the second half of the calendar year 2019. Contingency arrangements are in place for a small number of clients who could be affected if the UK leaves the EU without a withdrawal or transition agreement before this licence is secured
Macquarie has a longstanding and deep commitment to the UK as the hub for the EMEA region’s operations and this will continue to be the case. Macquarie has been in the UK for 30 years with over 1,900 staff based there as at 31 March 2019
Many of Macquarie’s EMEA business lines have successfully built out from a strong UK hub to create a meaningful presence across continental Europe

Germany

Macquarie continues to cooperate with German authorities in relation to an historical German lending transaction in 2011. No current staff members have been interviewed to date. The total amount at issue is not material and MGL has provided for the matter
As previously stated, Macquarie resolved two dividend trading matters that took place between 2006 and 2009. The industry-wide investigation relating to dividend trading continues and Macquarie continues to respond to requests for information about its activities in this market. Macquarie’s profits from these activities were not material

‘Liquidity - frequently asked questions’; 22 Jul 19. 2. https://www.macquarie.com/au/about/newsroom.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Operating groups update

• Effective 1 July 2019

Certain fiduciary businesses, such as the infrastructure debt business (MIDIS), moved from CAF Asset Finance in the Banking Group to MAM in the Non-Banking Group following receipt of required approvals

• Effective 1 September 2019

Each of CAF’s divisions will be aligned to other businesses, where they have the greatest opportunities in terms of shared clients and complementary offerings:
CAF Principal Finance, excluding Transportation Finance, will join Macquarie Capital to bring together all principal investing activity and enhance our ability to invest directly and alongside clients and partners
CAF Transportation Finance will join Macquarie Asset Management, reflecting its evolution towards a fiduciary business following the recent sale of a stake in the portfolio to PGGM
CAF Asset Finance will move to Commodities and Global Markets, reflecting a longstanding, shared focus on innovative financing solutions for corporates, some of which are already shared clients
1H20 results will be reported under the new Group structure with rebased prior periods

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Management changes:

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Renewal and globalisation of Executive Committee

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G AR R Y F AR R EL L F L O R IAN H ER O L D
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Corporate and Asset Finance (CAF)

Garry Farrell has announced his intention to retire as Co-Head of CAF and from the Executive Committee effective 1 September 2019
Mr Farrell has been with Macquarie for 33 years and on the Executive Committee for nine years
Effective 1 December 2018, Florian Herold, previously Co-Head of CAF Principal Finance in EMEA, was appointed Group Head of CAF Principal Finance and joined the Executive Committee
Mr Herold joined Macquarie in 2009 and has over 15 years of investment experience
- This followed Ben Brazil stepping down as Group Head of CAF Principal Finance, and from the Executive Committee. Mr Brazil had been with Macquarie for 25 years and on the Executive Committee for four years
Effective 1 September 2019, CAF Principal Finance will join MacCap. Mr Herold will continue to lead Principal Finance and will remain on the Executive Committee

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D AN IEL W O N G MIC H A EL SIL VER T O N
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Macquarie Capital (MacCap)

Effective 1 June 2019, Daniel Wong, previously Global Co-Head of the Infrastructure and Energy Group, and Michael Silverton, previously Head of the Americas, Europe and Asia Group, were appointed Group Co-Heads of MacCap and joined the Executive Committee
Both have been with Macquarie for 20 years, the majority of which has been spent building the MacCap business in international markets
This followed Tim Bishop retiring as Group Head of MacCap and from the Executive Committee
Mr Bishop had been with Macquarie for 20 years and on the Executive Committee for nine years

N IC H O L AS O ’ K AN E

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Commodities and Global Markets (CGM)

• Effective 1 April 2019, Nicholas O’Kane was appointed Group Head of CGM, following two years of transition in anticipation of this change

Mr O’Kane has been with Macquarie for 24 years and on the Executive Committee since June 2017
This followed Andrew Downe stepping down as Group Head of CGM and from the Executive Committee. He continues to lead the Cash Equities business globally and retains leadership for CGM in Asia

• Mr Downe had been with Macquarie for 33 years and was on the Executive Committee for 22 years

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MAR T IN S T AN L E Y
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Macquarie Asset Management (MAM)

Effective 1 December 2018, Martin Stanley was appointed Group Head of MAM and joined the Executive Committee. He continues to lead MIRA globally within MAM
Mr Stanley joined Macquarie in 2004 and has over 30 years of experience in asset management, infrastructure and utilities
This followed Shemara

Wikramanayake’s appointment to Managing Director and CEO of Macquarie Group

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04 FY20 Outlook

Shemara Wikramanayake Managing Director and Chief Executive Officer

Overview of FY19

1Q20 Update

FY20 Outlook

Formal Business Glossary

FY19 Highlights

Macquarie I Annual General Meeting I macquarie.com

Factors impacting short-term outlook

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Annuity-style businesses

Markets-facing businesses

Macquarie Asset Management (MAM)

Base fees expected to be broadly in line, benefiting from the deployment of capital and full-year effect of platform acquisitions, offset by divestments and internalisation of ALX

Performance fees and investment-related income (net of impairments) expected to be broadly in line

Corporate and Asset Finance (CAF)

Asset Finance portfolio broadly in line

Principal Finance expected to be down due to reduced loan volumes and timing of realisations

Banking and Financial Services (BFS)

Higher loan portfolio and platform volumes Competitive dynamics to drive margin pressure

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FY19
Net profit
contribution
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Commodities and Global Markets (CGM)

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

Equities expected to remain challenging

Reduced impact from impairments

Business benefited from strong market conditions in FY19 which continued into 1Q20, however we do not expect these conditions to continue through remainder of FY20

Macquarie Capital (MacCap)

Assume market conditions broadly consistent with FY19

With capital usage broadly constant in FY19, expect solid pipeline of investment realisations however investment-related income expected to be down

Corporate

Compensation ratio to be consistent with historical levels Based on present mix of income, the FY20 effective tax rate is expected to be broadly in line with FY19

Note: Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. Pie chart is based on FY19 net profit contribution from Operating Groups.

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

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Short-term outlook

• The Group’s result for FY20 is currently expected to be slightly down on FY19

Our short-term outlook remains subject to:
The completion rate of transactions
Market conditions
The impact of foreign exchange
Potential regulatory changes and tax uncertainties
Geographic composition of income

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

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Medium-term

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 mainly provided by two Operating Groups which are delivering superior returns following years of investment and acquisitions
- Macquarie Asset Management and Banking and Financial Services
Two predominantly 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 program to identify cost saving initiatives and efficiency
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

Overview of FY19

1Q20 Update

FY20 Outlook

Glossary

FY19 Highlights

Formal Business

Macquarie I Annual General Meeting I macquarie.com

Medium-term

Annuity-style businesses

Macquarie Asset Management (MAM)

Leading platform , well placed to grow assets under management through MAM’s diversified product offering, track record and experienced local investment teams

Well positioned for organic growth

Banking and Financial Services (BFS)

Strong growth opportunities through intermediary and direct retail client distribution, 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

Markets-facing businesses

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 sector and region

Opportunities for project development and balance sheet investment by the group and in support of partners and clients subject to market conditions

Commodities and Global Markets[1] (CGM)

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

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

Tailored finance solutions globally across a variety of industries and asset classes

Growing the client base across all regions

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Leveraging a strong market position in Asia-Pacific through investment in the equities platform

Non-Banking group

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05 Formal Business

Peter Warne Chairman

AI assistant

Macquarie Group Limited — AGM Information 2019

10518_rns_2019-07-24_cffa0ed6-794e-4498-9d5a-f93e1ebbd4f5.pdf

Disclaimer

Financial performance

FY19 dividend

Board changes

PHILIP COFFEY

JILLIAN BROADBENT AO

Risk culture and conduct

Risk culture and conduct in practice

Recent risk culture and conduct specific initiatives

The Integrity Office

Environmental, Social and Governance (ESG)

ESG Scope

Social

Environment

Governance

FY19 Highlights

Actively supporting our clients and communities in the global energy transition: Focused on driving solutions across all sources of emissions

Macquarie Group Foundation

50 years of unbroken profitability

Diversification by region

FY19 net profit contribution from Operating Groups

Annuity-style businesses

Markets-facing businesses

MAM: on FY18

CAF: on FY18

CGM: on FY18

Macquarie Capital: on FY18

BFS: on FY18

Macquarie Asset Management

MIRA

MIM

~80%

Corporate and Asset Finance

Banking and Financial Services

Commodities and Global Markets

$A1,505m

Commodity Markets & Finance

Cash Equities and Equity Derivatives & Trading

Fixed Income & Currencies

Futures

Credit Markets

Macquarie Capital

Total revenue on FY18

Notable deals included:

As at 31 March 2019

Business backed by strong funding and capital

Macquarie Asset Management

Corporate and Asset Finance

Banking and Financial Services

Commodities and Global Markets

Macquarie Capital

FY19 contribution[1]

Funded balance sheet remains strong

Basel III capital position

Capital management update

Macquarie Group Employee Retained Equity Dividend Reinvestment Plan (DRP) Plan (MEREP)

Business growth

CAF

BFS

MacCap

$A0.1b total increase

Corporate

Strong regulatory ratios

Regulatory update

Regulatory update

Regulatory update

Regulatory update (cont’d)

Brexit

Germany

Operating groups update

Operating groups update

• Effective 1 July 2019

• Effective 1 September 2019

Management changes:

Renewal and globalisation of Executive Committee

Corporate and Asset Finance (CAF)

N IC H O L AS O ’ K AN E

Macquarie Group Limited AGM Information 2019