The Macquarie Group Ltd (ASX: MQG) share price climbed 0.55% higher yesterday to close at $121.00 per share.
On a day when the S&P/ASX 200 Index (ASX: XJO) surged 0.83% higher, Macquarie was doing some of the heavy lifting.
Investors have been bullish on ASX bank shares in recent months but is Macquarie a solid buy in the current market?
Why the Macquarie share price has surged higher
Macquarie was not immune to the bear market we saw in February and March. In fact, the Macquarie share price fell 52.4% from 21 February to 23 March.
However, it's been a different story since then with Macquarie's market capitalisation rocketing to $43.5 billion.
That's good news for current shareholders, but where does it leave prospective investors?
There are quite a few headwinds facing ASX bank shares like Macquarie right now. The effects of the 2018 Royal Commission are still lingering while the coronavirus pandemic and subsequent lockdown have presented some unique challenges for the sector.
Macquarie is somewhat different from its other major bank peers. It is more of an investment bank compared to the retail and business banks like Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB).
This creates some opportunities for the Macquarie share price to chart a different path through the current market conditions.
For instance, Macquarie's full-year earnings provided some hope for investors.
Full year earnings
The ASX bank posted an 8% decline in net profit to $2,731 million for the 12 months ended 31 March. Macquarie was certainly not immune from the impacts of COVID-19 and announced $1,040 million worth of impairments.
But it wasn't all bad news with Macquarie's assets under management swelling 10% to $606.9 billion by year-end.
The Aussie bank also declared a final dividend while some of its cohorts like Westpac Banking Corp (ASX: WBC) pulled back on their dividend payments.
Importantly, the bank's investment arms showed signs of strong performance. This included a 16% increase in net profit contribution from Macquarie Asset Management (MAM) to $2,177 million.
Of course, there were downsides to the result including an inability to provide meaningful guidance for FY21.
However, I believe there are positive signs that Macquarie's various business units can combine to stabilise earnings, despite the tough operating environment.
How does Macquarie compare to other ASX bank shares?
The Macquarie share price has now climbed 68% higher since 23 March.
It's been a similar story for many ASX 200 shares with investors sending the index climbing by 36% since its March low.
However, I still think there are plenty of risks facing Macquarie and the other big banks right now. If you're a long-term investor, I think it's worth waiting until further results come out in October or November before jumping in.
This will provide the best picture of Macquarie's financial position and how its various investment arms have performed in 2020.
I'll be taking the same approach for both National Australia Bank and CommBank shares. National Australia Bank's share price is up 36.6% since 23 March which could mean investors are a bit more skeptical about the big four compared to Macquarie.
Foolish takeaway
All the ASX banks have seen their values soar since the February/March crash but I'm not bullish enough to buy Macquarie at its current price.
