The Macquarie Group Ltd (ASX: MQG) share price will be one to watch on Thursday.
This follows the release of the investment bank's quarterly update this morning ahead of its annual general meeting.
Macquarie share price on watch following strong Q1 update
All eyes will be on the Macquarie share price this morning after the investment bank revealed that it started FY 2023 in fine form.
According to the release, favourable trading conditions saw Macquarie's operating groups deliver net profit contributions that were up on the first quarter of FY 2022.
And while no actual figures were provided, management advised that its annuity-style businesses, Macquarie Asset Management (MAM) and Banking and Financial Services (BFS), delivered a combined first quarter net profit contribution that was "significantly" up on the prior corresponding period.
This was due largely to income from Green Investment Group (GIG) asset realisations in MAM, which was partially offset by the Macquarie Infrastructure Corporation disposition fee from last year.
The contribution from the BFS business was broadly in line with the prior corresponding period.
What about its other businesses?
Elsewhere, Macquarie's markets-facing businesses, Commodities and Global Markets (CGM) and Macquarie Capital, delivered a combined first quarter net profit contribution that was "slightly up" on the prior corresponding period.
This was due to strong results across the Commodities platform in CGM including the impact of timing of income recognition on gas transport and storage contracts and higher investment–related income in Macquarie Capital. Partially offsetting this was the sale of the CGM UK commercial and industrial smart meters portfolio a year earlier.
Finally, Macquarie advised that its financial position continues to comfortably exceed the Australian Prudential Regulation Authority's (APRA) Basel III regulatory requirements. At the end of June, the company had a group capital surplus of $10.1 billion and Common Equity Tier 1 capital ratio of 12.3%.
Outlook
In the near term, management advised that it continues to maintain a cautious stance, with a conservative approach to capital, funding and liquidity that it believes positions the company well to respond to the current environment.
The company sounds much more positive with its medium term outlook. It concluded:
Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; a strong and conservative balance sheet; and a proven risk management framework and culture.
