Macquarie to raise $1.5b as profits double

Macquarie Group is looking to raise more than $1.5 billion in equity to invest in business opportunities and meet tougher capital requirements, as half-year profits doubled to $2.04 billion.

The investment bank on Friday said it would seek to raise $1.5 billion from institutional investors through a placement, and it would also launch a share purchase plan to allow retail investors to chip in.

Macquarie Group chief Shemara Wikramanayake says the capital raise will give the group “additional flexibility” as it eyes new investments. Credit:Ryan Stuart

The profit results is ahead of guidance the investment bank gave last month, when it said earnings would be “slightly” less than the $2.03 billion it made in the six months to March.

“This first half saw a significant increase in net profit contribution from all four operating groups compared with 1H21, a period which was affected by the COVID-19 pandemic,” chief executive Shemara Wikramanayake said.

“Today’s result is consistent with a strong 2H21 and reflects improved trading conditions across our diverse platform.”

On the capital raising, Ms Wikramanayake said the company had experienced sustained and material growth in its capital requirements, and after deploying $5.5 billion in capital over the most recent two halves, it saw a strong pipeline of opportunities.

“Raising new capital provides us with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive to our shareholders, while maintaining an appropriate capital surplus,” she said.

The company declared an interim dividend of $2.72 a share, which will be 40 per cent franked.

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