November 12, 2025 • 18 mins
Macquarie’s reputation as Australia’s “millionaires factory” is under strain. The investment giant’s latest profit fell short of expectations, sending its shares sliding and investors questioning whether its golden era is fading. Commodities trading – once the powerhouse of the bank – is losing steam amid regulatory pressure and a calmer market, while leadership faces scrutiny over pay and performance.
Bloomberg’s finance editor Adam Haigh joins Rebecca Jones to unpack what’s gone wrong, where the bright spots remain, and whether CEO Shemara Wikramanayake can steady the ship. Plus, how Macquarie stacks up against Australia’s big four banks in an increasingly competitive lending and investment landscape.
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Episode Transcript
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Speaker 1 (00:01):
I'm Rebecca Jones and this is the Bloomberg Australia podcast,
where each week we go behind the biggest stories shaping
Australia's place in global business. Shares in McQuary Group took
a dive after its one point seven billion dollar profit
didn't meet expectations. Mcquarie has agreed to fourcarts three hundred
and twenty one million dollars in compensation to the victims
(00:23):
of a rogue investment scheme. I think overall we have
maintained our our look as we are guided At the
beginning of this year, they still call it the millionaire's factory.
But right now the machines are spluttering. Mcquarie's shares are
down almost ten percent since October. Is our homegrown investment
giant starting to lose its mojo? To help me take
(00:46):
a look at just what's going on at our fifth
largest bank, I'm joined by our Sydney based finance editor,
Adam Hague.
Speaker 2 (00:53):
Adam, welcome back to the pod. Thanks very much, it's
great to be back.
Speaker 1 (00:58):
So investors really punished Quarry after the results last week.
Shares were down more than like seven percent in one session.
What drove that reaction Adam.
Speaker 3 (01:09):
Yes, I think the share reaction beck was actually quite
renounced and quite surprising to a lot of people. So
broadly speaking, that the profit number was a little light,
and I think there were certain areas of the business
that really stood out as just continuing to see quite
a few headwinds, and one of those, most notably, of course,
(01:32):
is the commodities in global markets business, and that's been
the real earner for Macquarie for many years, but in
the past kind of eighteen months or so shown that
some areas of that business have been struggling, and I
think what investors were looking for going into these numbers
were some signs of support there and they didn't get that. Indeed,
(01:54):
a few people have brought down their expectations for full
year profit based around the struggles in that business, so
I think that was a key part of it. And
then there's also the sense that you know, overall, you know,
bank stocks have been have been doing reasonably well, so
expectations were going into this, you know, people did want
(02:15):
a little bit more than they got, so I think
the move ended up being a bit more pronounced because
of that disappointment.
Speaker 1 (02:21):
So the market's message to mcquarie here seems to be
you know, we're not buying mcquarie's story as readily as
we used to.
Speaker 3 (02:29):
Well, I think the tricky thing with mcquarie is that
they've had this historical legacy of just continuing year after
a year after year to drive these these profits. So
I think it should be seen against that backdrop. That
is important context to understand what people feel when they
own mcquarie stock, both retail investors here in Australia, but
(02:49):
also big institutional investors that hold Mcquarie that might be
based in other parts of the world and that may
indeed have held the shares for a long time. Expectations
are still very high on what this company can deliver
based on what it's done in the past. So there
are still lots of people who are prepared to bet
that they can get back to the good old days
(03:10):
of real pronounced profit growth. But I think at the
moment they are going through a tough patch. There's no
doubt about that.
Speaker 1 (03:18):
Adam. Let's dig in a little bit deeper into the divisions.
You briefly mentioned commodities, and I want to get into
that a little bit more deeply later. Despite the headline
disappointment that than investors had last week. There were some
bright spots though, right particularly in asset management and investment banking.
(03:38):
Why was that and what hasn't gone so well for
them recently?
Speaker 3 (03:42):
Yes, I do think it's important to remember just how
huge this organization is and to break it down into
the division. So one of the areas of bright spots
was banking and financial services, that's the name of their
main banking arm, which has been really pushing into Australia
home loans. That's been one of the key growth areas
(04:03):
and they now have got up to a position where
they have about six and a half percent of the
market share there of Australian home loans. And this is
of course an area that's been immensely profitable for Australia's
biggest bank, Commonwealth Bank.
Speaker 2 (04:16):
Of Australia, for many, many years.
Speaker 3 (04:18):
But Mcquarie over the last few years has just been
chipping away with a digital first product that really pushes technology.
You don't have to go into a branch, you just
do it all on the app, you get your mortgage
approved quite quickly, and that it seems, is continuing to
provide really good numbers from Macquary. They're prepared to keep
(04:39):
committing capital to that and keep spending to try and
grow that area. So I do think that's one important area.
But also Macquarie Asset Management, the big infrastructure arm of
Macquarie that's built up over the years to now become
a real huge player on a global scale, that also
is showing some signs of doing well from continued fee
(05:01):
growth and around some of the assets that it still
owns in that area. So I think those two divisions
that are notable did pretty well this time around. Now
on the negative side, I did mention commodities in global markets,
that is the biggest part of Macquarie, and that is
(05:21):
still struggling. But then there are a couple of other
areas as well that are just struggling. And I think,
you know, investment banking activity in Macquarie Capital did pick up,
so that in some sense is a bright spot. But
I think some of the commentary around what's playing out
for the second half of this year suggested that that
(05:43):
growth might be a bit more muted over the next
six months, so comments around the deal pipeline, mergers and
acquisitions activity might be a little bit more subdued. So
I think, you know, you do have a couple of
areas there which speak to the fact that the second
half of this year is still going to be pretty
tough for mcquarie.
Speaker 1 (06:00):
And I know you've been doing a lot of reporting
on the commodity side of mcquarie. You had a story
out recently that I'll pop in the show notes for
our listeners to check out a little bit later.
Speaker 2 (06:13):
Can you talk us.
Speaker 1 (06:13):
Through why investors are now uneasy about the commodity's business
because that was their golden goose for a great many years,
right it.
Speaker 3 (06:23):
Was, and it's a business that's grown over time, as
we kind of explored in that story, that bolted on
businesses that they acquired, but they've also grown it organically
from within Mcquarie for it to be a real powerhouse.
I mean, it used to be led by Nicocaine, who's
a very famous trader in that division, who left mcquarie
(06:46):
last year to join Mercuria in Switzerland. So you know
you have had not just him, but a number of
other senior traders leave that division. They are also facing
white some headwinds in North American energy markets, where some
other Cedia traders in their Houston office have also left.
(07:08):
In recent months, so they are finding it difficult, I think,
to continue to take the risk that they used to.
Speaker 2 (07:15):
Generate the profits. Now.
Speaker 3 (07:16):
Part of that is because of compliance and a continued
burden on compliance, but also some of this regulatory pressure
that the bank has been facing in lots of jurisdictions
in recent years. I think that's making it harder for
them to take the risks that they used to to
generate the profit. So I think all that in totality
(07:40):
just means that that business is getting harder to make
money in now. The other area, of course, is just
how markets themselves behave and how commodities markets behave. If
the subdued activity and there's less volatility in that area
of global markets, then you tend to see prices depressed,
but also less of a trading opportunity because prices don't
(08:04):
move as much.
Speaker 2 (08:05):
And of course, historically a couple.
Speaker 3 (08:06):
Of years ago when you had the big energy market
flare up and the war in Ukraine started, you know,
you've got huge spikes in energy markets and you've got
a lot of money for mcquariy to be made in
trading those markets and its customers. So we're not in
that period anymore, we're in a more subdued period and
indeed that's making it harder.
Speaker 1 (08:26):
And of course Nico Kaine that you just mentioned, he
was paying more than the CEO when he was at mcquarie,
wasn't he.
Speaker 3 (08:31):
He was, Yeah, And that speaks to just how well
you can do at mcquarie if you're in a business
that's generating very good profits. You know, the whole pay
structure at mcquarie is designed to reward people who can
make money on the way up. So he was a
very good example of that. And Simon Wright, who now
(08:53):
runs that business, is also you know, still doing still
doing very well, even though his businesses not doing just
as well as it was a year or two ago.
Speaker 1 (09:02):
And what is the the CEO Shamara Wikram and a
Yaki saying about that?
Speaker 3 (09:09):
Well, I think for Shamara really she's trying to paint
a picture of we've told analysts and investors where the
difficulties are. She pointed out in commodities in global markets
that its trade finance.
Speaker 2 (09:21):
Business continues to do very well.
Speaker 3 (09:24):
There's guidance there which she's trying to kind of and
she's done this for a while. Is just play down
the idea that we're not in a period of high
market activity like we were a year or two ago,
so people should dial down their expectations. So she's trying
to kind of, you know, somewhat reset people's expectations so
that they can deliver something that's in line with it,
(09:45):
in line with a slightly lower set of.
Speaker 2 (09:49):
Targets on people's minds.
Speaker 1 (09:51):
And this is all, you know, on the backdrop of
quite significant or not insignificant shareholder discontent that we've seen
over executive pay. Now back in July, Adam in VISs
has gave mcquarie a strike against its pay report. Can
you explain what that is and how much of that
discontent is feeding through to the reaction that we saw
(10:14):
in the share price last week.
Speaker 3 (10:16):
Yeah, Well, the setup for this, remember, was a few
weeks heading into that AGM at the end of July
was characterized by Macquarie having to deal with quite a
lot of investor feedback on some of the issues that
were going on around their pay structure, but specifically around
how their pay structure deals with problems. So when there
(10:38):
are problems associated with regulatory risk, so be that the
Australian Securities Regulator or problems that they've had in Germany
or the UK or in the US, the right accountability
happens for senior executives and they get an appropriate cut
to their compensation or that you know, the accountability is
(11:01):
there and they can demonstrate that. So I think that
was what a lot of the investor feedback was around that.
So going into the AGM, it kind of set the
tone for Macquarie wanting to get out in front. And
indeed Chamara at the AGM was very clear about how
she'd actually spoken to a lot more of her top
(11:22):
thirty investors than she normally does, and she was very
clear to say that although she wasn't always leading those discussions,
she was really listening to those investors, and of course
some of those were some of the big Australian pension funds,
but also big overseas institutional investors as well. So I
think what you've seen in subsequent weeks and subsequent months
(11:44):
since the AGM is a demonstration of that. There's a
document that shows how executives have been held accountable for
some of the problems, and indeed Shamara herself, you know,
her compensation has been lowered as about five million Australian
dollars that she's forfeitters. So there is a demonstrated now
(12:07):
accountability of some of the issues that have been going
on over the last few years. And I think that
discontent is fading somewhat in the sense that Macquarie is
now trying to draw a line under that. The board
and senior management have said, listen, we've listened to you,
we've changed and we've thought some more about the way
(12:29):
we hold people to account when things don't go right,
and they've tried to say, listen, we've done the right
thing here.
Speaker 1 (12:36):
Austin answered, let's see how it goes looking forward, Adam,
what are the signposts that investors are going to watch
for to decide whether or not they're still going to
back mcquarie. You know, more than half the analysts that
we track at Bloomberg have got a buy recommendation last
(12:57):
time I checked after the update last week. What are
the analysts scene?
Speaker 3 (13:01):
I do think that the majority of the analyst community
are still, broadly speaking.
Speaker 2 (13:06):
Kind of bullish on Macquarie.
Speaker 3 (13:08):
I think part of that's to do with how much
the shares of underperformed recently, which does give them some
sign that you know, we might be through this bad
patch and that return on equity might start to pick
up again. But I think there's also a few analysts
in there, including Bloomberg Intelligence as Matt Ingram, who he's
(13:30):
still saying the second half of this year still looks,
you know, somewhat tricky. There's still a lot playing out there.
You've got the weakness in the commodities and markets business.
You do have potential, of course for McQuary asset management
to continue generating that fee income, and they also make
money when they sell big assets, and there are some
(13:51):
of those in the pipeline that might get sold in
the next six months, which could help profitability.
Speaker 2 (13:57):
In that area.
Speaker 3 (13:58):
So I think viciously optimistic maybe would be a term
to kind of characterize how the street is viewing mcquarie
at the moment. But I don't think anyone's banking on
a blowout second half of the year now. But of
course we'll have to wait until May when their four
year numbers come out to really know.
Speaker 1 (14:15):
And the big question that everyone is asking is succession
around the CEO Shamara. Now she's been in the hot
seat for about seven years now, is there someone waiting
in the wings to take her job.
Speaker 3 (14:26):
Yes, this topic of her succession is kind of like
an ongoing discussion and rumor mill within markets, not just
in Australia, but in trading floors in other areas of
the world as well, just because this financial giant is
such an interesting company for many people and really punches
(14:47):
above its weight in the banking sphere. So I think
how long she's going to stay is still an open question.
There's a sense after the chief financial officer, Alex harv
he said that he would leave soon, that she will
probably stay on a little bit longer to make sure
that there's a good transition. They have a good internal
(15:10):
candidate coming through, So that kind of the baseline expectation
is that she'll probably get to ten years, so at
least another few years from her. It would certainly be
a surprise to a lot of people if it was
any sooner than that. But of course you never quite know,
and there may be an opportunity for her, you know,
(15:31):
to leave a little bit earlier, but I think for now,
all the noises suggest that she will stick around for
a little bit longer.
Speaker 1 (15:39):
And finally, let's touch on the big four banks, who've
all updated the market in the past couple of weeks.
You and I of course spoke to the CEO of WISPAC,
Anthony Miller, just last week, and it also looks like
in vist has liked what they saw from the Nuno
Geddon Nuno matters the new CEO of A and Z.
Any big surprises there for you in the results that
(15:59):
have come out, Adam.
Speaker 3 (16:01):
Well, I do think that A and Z has been
a standout outperformer.
Speaker 2 (16:05):
I mean, if you look at how that share price is.
Speaker 3 (16:08):
Doing now over the year, I mean it's up thirty
percent and is notably outperforming the broader market but also
the broader landscape of banks, and a lot of that,
of course, is predicated on a belief that Nunomatos can
change that bank around, that he can wim back market
share in the traditional home loan market for Enzed that
(16:29):
it's struggled in in recent years. He's obviously slimming down
the workforce in certain areas, he's cutting duplication, he's completely
reformed the risk and the compliance structures of the bank.
So hopefully he can not just get investors back on side,
but he can also over time get regulators back on
side as well. And as I say, that's been at
(16:53):
the moment rewarded in the share price and I think
you can see that. So yes, A and Z has
been a standout there. It is worth just mentioning Commonwealth
Bank of Australia this week. Their share price did get
hit fairly hard on Tuesday morning after they had their
first quarter update. There wasn't much in that because it's
only a five or six page document, so not a
(17:14):
huge amount of detail, but I think it did really
speak to the competition that still exists in home loans
and the margins still being under pressure there. So I
think they have a little bit to look at over
these next few months. They're making a big push into
business banking, which is continuing to do pretty well, but
I think they are a notable standout as well. On
(17:34):
the downside.
Speaker 1 (17:36):
If you found today's conversation insightful, be sure to follow
the Bloomberg Australia Podcast wherever you listen, and check for
more reading on Australia's banking sector, including the latest reporting
from Adam Hague at Bloomberg dot com. This episode was
recorded on the traditional lands of the will Wondery and
Getigal people. It was produced by Paul Allen and edited
(17:56):
by Ainsley Chandler and Chris Burke. I'm Rebecca Jones, and
we'll see you next week.
Speaker 3 (18:04):
MHM.
I'm Rebecca Jones and this is the Bloomberg Australia podcast,
where each week we go behind the biggest stories shaping
Australia's place in global business. Shares in McQuary Group took
a dive after its one point seven billion dollar profit
didn't meet expectations. Mcquarie has agreed to fourcarts three hundred
and twenty one million dollars in compensation to the victims
(00:23):
of a rogue investment scheme. I think overall we have
maintained our our look as we are guided At the
beginning of this year, they still call it the millionaire's factory.
But right now the machines are spluttering. Mcquarie's shares are
down almost ten percent since October. Is our homegrown investment
giant starting to lose its mojo? To help me take
(00:46):
a look at just what's going on at our fifth
largest bank, I'm joined by our Sydney based finance editor,
Adam Hague.
Speaker 2 (00:53):
Adam, welcome back to the pod. Thanks very much, it's
great to be back.
Speaker 1 (00:58):
So investors really punished Quarry after the results last week.
Shares were down more than like seven percent in one session.
What drove that reaction Adam.
Speaker 3 (01:09):
Yes, I think the share reaction beck was actually quite
renounced and quite surprising to a lot of people. So
broadly speaking, that the profit number was a little light,
and I think there were certain areas of the business
that really stood out as just continuing to see quite
a few headwinds, and one of those, most notably, of course,
(01:32):
is the commodities in global markets business, and that's been
the real earner for Macquarie for many years, but in
the past kind of eighteen months or so shown that
some areas of that business have been struggling, and I
think what investors were looking for going into these numbers
were some signs of support there and they didn't get that. Indeed,
(01:54):
a few people have brought down their expectations for full
year profit based around the struggles in that business, so
I think that was a key part of it. And
then there's also the sense that you know, overall, you know,
bank stocks have been have been doing reasonably well, so
expectations were going into this, you know, people did want
(02:15):
a little bit more than they got, so I think
the move ended up being a bit more pronounced because
of that disappointment.
Speaker 1 (02:21):
So the market's message to mcquarie here seems to be
you know, we're not buying mcquarie's story as readily as
we used to.
Speaker 3 (02:29):
Well, I think the tricky thing with mcquarie is that
they've had this historical legacy of just continuing year after
a year after year to drive these these profits. So
I think it should be seen against that backdrop. That
is important context to understand what people feel when they
own mcquarie stock, both retail investors here in Australia, but
(02:49):
also big institutional investors that hold Mcquarie that might be
based in other parts of the world and that may
indeed have held the shares for a long time. Expectations
are still very high on what this company can deliver
based on what it's done in the past. So there
are still lots of people who are prepared to bet
that they can get back to the good old days
(03:10):
of real pronounced profit growth. But I think at the
moment they are going through a tough patch. There's no
doubt about that.
Speaker 1 (03:18):
Adam. Let's dig in a little bit deeper into the divisions.
You briefly mentioned commodities, and I want to get into
that a little bit more deeply later. Despite the headline
disappointment that than investors had last week. There were some
bright spots though, right particularly in asset management and investment banking.
(03:38):
Why was that and what hasn't gone so well for
them recently?
Speaker 3 (03:42):
Yes, I do think it's important to remember just how
huge this organization is and to break it down into
the division. So one of the areas of bright spots
was banking and financial services, that's the name of their
main banking arm, which has been really pushing into Australia
home loans. That's been one of the key growth areas
(04:03):
and they now have got up to a position where
they have about six and a half percent of the
market share there of Australian home loans. And this is
of course an area that's been immensely profitable for Australia's
biggest bank, Commonwealth Bank.
Speaker 2 (04:16):
Of Australia, for many, many years.
Speaker 3 (04:18):
But Mcquarie over the last few years has just been
chipping away with a digital first product that really pushes technology.
You don't have to go into a branch, you just
do it all on the app, you get your mortgage
approved quite quickly, and that it seems, is continuing to
provide really good numbers from Macquary. They're prepared to keep
(04:39):
committing capital to that and keep spending to try and
grow that area. So I do think that's one important area.
But also Macquarie Asset Management, the big infrastructure arm of
Macquarie that's built up over the years to now become
a real huge player on a global scale, that also
is showing some signs of doing well from continued fee
(05:01):
growth and around some of the assets that it still
owns in that area. So I think those two divisions
that are notable did pretty well this time around. Now
on the negative side, I did mention commodities in global markets,
that is the biggest part of Macquarie, and that is
(05:21):
still struggling. But then there are a couple of other
areas as well that are just struggling. And I think,
you know, investment banking activity in Macquarie Capital did pick up,
so that in some sense is a bright spot. But
I think some of the commentary around what's playing out
for the second half of this year suggested that that
(05:43):
growth might be a bit more muted over the next
six months, so comments around the deal pipeline, mergers and
acquisitions activity might be a little bit more subdued. So
I think, you know, you do have a couple of
areas there which speak to the fact that the second
half of this year is still going to be pretty
tough for mcquarie.
Speaker 1 (06:00):
And I know you've been doing a lot of reporting
on the commodity side of mcquarie. You had a story
out recently that I'll pop in the show notes for
our listeners to check out a little bit later.
Speaker 2 (06:13):
Can you talk us.
Speaker 1 (06:13):
Through why investors are now uneasy about the commodity's business
because that was their golden goose for a great many years,
right it.
Speaker 3 (06:23):
Was, and it's a business that's grown over time, as
we kind of explored in that story, that bolted on
businesses that they acquired, but they've also grown it organically
from within Mcquarie for it to be a real powerhouse.
I mean, it used to be led by Nicocaine, who's
a very famous trader in that division, who left mcquarie
(06:46):
last year to join Mercuria in Switzerland. So you know
you have had not just him, but a number of
other senior traders leave that division. They are also facing
white some headwinds in North American energy markets, where some
other Cedia traders in their Houston office have also left.
(07:08):
In recent months, so they are finding it difficult, I think,
to continue to take the risk that they used to.
Speaker 2 (07:15):
Generate the profits. Now.
Speaker 3 (07:16):
Part of that is because of compliance and a continued
burden on compliance, but also some of this regulatory pressure
that the bank has been facing in lots of jurisdictions
in recent years. I think that's making it harder for
them to take the risks that they used to to
generate the profit. So I think all that in totality
(07:40):
just means that that business is getting harder to make
money in now. The other area, of course, is just
how markets themselves behave and how commodities markets behave. If
the subdued activity and there's less volatility in that area
of global markets, then you tend to see prices depressed,
but also less of a trading opportunity because prices don't
(08:04):
move as much.
Speaker 2 (08:05):
And of course, historically a couple.
Speaker 3 (08:06):
Of years ago when you had the big energy market
flare up and the war in Ukraine started, you know,
you've got huge spikes in energy markets and you've got
a lot of money for mcquariy to be made in
trading those markets and its customers. So we're not in
that period anymore, we're in a more subdued period and
indeed that's making it harder.
Speaker 1 (08:26):
And of course Nico Kaine that you just mentioned, he
was paying more than the CEO when he was at mcquarie,
wasn't he.
Speaker 3 (08:31):
He was, Yeah, And that speaks to just how well
you can do at mcquarie if you're in a business
that's generating very good profits. You know, the whole pay
structure at mcquarie is designed to reward people who can
make money on the way up. So he was a
very good example of that. And Simon Wright, who now
(08:53):
runs that business, is also you know, still doing still
doing very well, even though his businesses not doing just
as well as it was a year or two ago.
Speaker 1 (09:02):
And what is the the CEO Shamara Wikram and a
Yaki saying about that?
Speaker 3 (09:09):
Well, I think for Shamara really she's trying to paint
a picture of we've told analysts and investors where the
difficulties are. She pointed out in commodities in global markets
that its trade finance.
Speaker 2 (09:21):
Business continues to do very well.
Speaker 3 (09:24):
There's guidance there which she's trying to kind of and
she's done this for a while. Is just play down
the idea that we're not in a period of high
market activity like we were a year or two ago,
so people should dial down their expectations. So she's trying
to kind of, you know, somewhat reset people's expectations so
that they can deliver something that's in line with it,
(09:45):
in line with a slightly lower set of.
Speaker 2 (09:49):
Targets on people's minds.
Speaker 1 (09:51):
And this is all, you know, on the backdrop of
quite significant or not insignificant shareholder discontent that we've seen
over executive pay. Now back in July, Adam in VISs
has gave mcquarie a strike against its pay report. Can
you explain what that is and how much of that
discontent is feeding through to the reaction that we saw
(10:14):
in the share price last week.
Speaker 3 (10:16):
Yeah, Well, the setup for this, remember, was a few
weeks heading into that AGM at the end of July
was characterized by Macquarie having to deal with quite a
lot of investor feedback on some of the issues that
were going on around their pay structure, but specifically around
how their pay structure deals with problems. So when there
(10:38):
are problems associated with regulatory risk, so be that the
Australian Securities Regulator or problems that they've had in Germany
or the UK or in the US, the right accountability
happens for senior executives and they get an appropriate cut
to their compensation or that you know, the accountability is
(11:01):
there and they can demonstrate that. So I think that
was what a lot of the investor feedback was around that.
So going into the AGM, it kind of set the
tone for Macquarie wanting to get out in front. And
indeed Chamara at the AGM was very clear about how
she'd actually spoken to a lot more of her top
(11:22):
thirty investors than she normally does, and she was very
clear to say that although she wasn't always leading those discussions,
she was really listening to those investors, and of course
some of those were some of the big Australian pension funds,
but also big overseas institutional investors as well. So I
think what you've seen in subsequent weeks and subsequent months
(11:44):
since the AGM is a demonstration of that. There's a
document that shows how executives have been held accountable for
some of the problems, and indeed Shamara herself, you know,
her compensation has been lowered as about five million Australian
dollars that she's forfeitters. So there is a demonstrated now
(12:07):
accountability of some of the issues that have been going
on over the last few years. And I think that
discontent is fading somewhat in the sense that Macquarie is
now trying to draw a line under that. The board
and senior management have said, listen, we've listened to you,
we've changed and we've thought some more about the way
(12:29):
we hold people to account when things don't go right,
and they've tried to say, listen, we've done the right
thing here.
Speaker 1 (12:36):
Austin answered, let's see how it goes looking forward, Adam,
what are the signposts that investors are going to watch
for to decide whether or not they're still going to
back mcquarie. You know, more than half the analysts that
we track at Bloomberg have got a buy recommendation last
(12:57):
time I checked after the update last week. What are
the analysts scene?
Speaker 3 (13:01):
I do think that the majority of the analyst community
are still, broadly speaking.
Speaker 2 (13:06):
Kind of bullish on Macquarie.
Speaker 3 (13:08):
I think part of that's to do with how much
the shares of underperformed recently, which does give them some
sign that you know, we might be through this bad
patch and that return on equity might start to pick
up again. But I think there's also a few analysts
in there, including Bloomberg Intelligence as Matt Ingram, who he's
(13:30):
still saying the second half of this year still looks,
you know, somewhat tricky. There's still a lot playing out there.
You've got the weakness in the commodities and markets business.
You do have potential, of course for McQuary asset management
to continue generating that fee income, and they also make
money when they sell big assets, and there are some
(13:51):
of those in the pipeline that might get sold in
the next six months, which could help profitability.
Speaker 2 (13:57):
In that area.
Speaker 3 (13:58):
So I think viciously optimistic maybe would be a term
to kind of characterize how the street is viewing mcquarie
at the moment. But I don't think anyone's banking on
a blowout second half of the year now. But of
course we'll have to wait until May when their four
year numbers come out to really know.
Speaker 1 (14:15):
And the big question that everyone is asking is succession
around the CEO Shamara. Now she's been in the hot
seat for about seven years now, is there someone waiting
in the wings to take her job.
Speaker 3 (14:26):
Yes, this topic of her succession is kind of like
an ongoing discussion and rumor mill within markets, not just
in Australia, but in trading floors in other areas of
the world as well, just because this financial giant is
such an interesting company for many people and really punches
(14:47):
above its weight in the banking sphere. So I think
how long she's going to stay is still an open question.
There's a sense after the chief financial officer, Alex harv
he said that he would leave soon, that she will
probably stay on a little bit longer to make sure
that there's a good transition. They have a good internal
(15:10):
candidate coming through, So that kind of the baseline expectation
is that she'll probably get to ten years, so at
least another few years from her. It would certainly be
a surprise to a lot of people if it was
any sooner than that. But of course you never quite know,
and there may be an opportunity for her, you know,
(15:31):
to leave a little bit earlier, but I think for now,
all the noises suggest that she will stick around for
a little bit longer.
Speaker 1 (15:39):
And finally, let's touch on the big four banks, who've
all updated the market in the past couple of weeks.
You and I of course spoke to the CEO of WISPAC,
Anthony Miller, just last week, and it also looks like
in vist has liked what they saw from the Nuno
Geddon Nuno matters the new CEO of A and Z.
Any big surprises there for you in the results that
(15:59):
have come out, Adam.
Speaker 3 (16:01):
Well, I do think that A and Z has been
a standout outperformer.
Speaker 2 (16:05):
I mean, if you look at how that share price is.
Speaker 3 (16:08):
Doing now over the year, I mean it's up thirty
percent and is notably outperforming the broader market but also
the broader landscape of banks, and a lot of that,
of course, is predicated on a belief that Nunomatos can
change that bank around, that he can wim back market
share in the traditional home loan market for Enzed that
(16:29):
it's struggled in in recent years. He's obviously slimming down
the workforce in certain areas, he's cutting duplication, he's completely
reformed the risk and the compliance structures of the bank.
So hopefully he can not just get investors back on side,
but he can also over time get regulators back on
side as well. And as I say, that's been at
(16:53):
the moment rewarded in the share price and I think
you can see that. So yes, A and Z has
been a standout there. It is worth just mentioning Commonwealth
Bank of Australia this week. Their share price did get
hit fairly hard on Tuesday morning after they had their
first quarter update. There wasn't much in that because it's
only a five or six page document, so not a
(17:14):
huge amount of detail, but I think it did really
speak to the competition that still exists in home loans
and the margins still being under pressure there. So I
think they have a little bit to look at over
these next few months. They're making a big push into
business banking, which is continuing to do pretty well, but
I think they are a notable standout as well. On
(17:34):
the downside.
Speaker 1 (17:36):
If you found today's conversation insightful, be sure to follow
the Bloomberg Australia Podcast wherever you listen, and check for
more reading on Australia's banking sector, including the latest reporting
from Adam Hague at Bloomberg dot com. This episode was
recorded on the traditional lands of the will Wondery and
Getigal people. It was produced by Paul Allen and edited
(17:56):
by Ainsley Chandler and Chris Burke. I'm Rebecca Jones, and
we'll see you next week.
Speaker 3 (18:04):
MHM.
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