Good morning, everyone and welcome to Macquarie's first half 2024 result. Before we begin, I would like to acknowledge the traditional custodians of this land and pay our respects to their Elders, past, present and emerging.
So this morning, you'll hear from our CEO and Managing Director, Shemara
Wikramanayake, and our CFO, Alex Harvey. With us here or online we've got our Group Heads as well. At the end of the presentation, we'll have an opportunity for question and answer. With that, I'll hand over to Shemara. Thank you.
Shemara Wikramanayake: Thanks, Sam, and good morning and welcome, everyone, from me as well. So as usual, I'll just commence by touching on our business footprint across our four Operating Groups, which have been in place for a long time now. Across those four, as you know, they give us very good diversification in terms of the underlying thematics to which they're exposed and all four of them are really well-positioned for medium-term structural growth with the areas they operate in. Our Australian Banking and Financial Services Group, is offering a customer experience- focused digital banking offering with long runway to grow in home loans, business banking and wealth. Then, to our three global businesses, our asset manager, Macquarie Asset Management, in Private Markets and Public Investments, with a great real asset franchise, which is growing a lot in this environment especially; our Commodities and Global Markets, which operates across assets and financial markets and commodities again, a long runway for that franchise to grow; and then Macquarie Capital, which is our advisory and capital solutions business growing in many regions, as well as bringing the Macquarie balance sheet alongside where we have deep expertise in debt and in equity. They're supported by our four key central services Groups across our Risk Management Group, Legal and Governance Group, Financial Management Group and Corporate Operations Group.
Now, turning to this most recent result of the half year, as you saw, we delivered a result of $A1,415 billion, which was down 39 per cent on the prior comparable period last financial year and down 51 per cent on the most recent half and the return on equity was 8.7 per cent. Given the change to the prior comparable period and the most recent one, I thought I might spend a moment on this next slide dwelling on some of the key drivers.

You can see that the Operating Group contribution as well was down 38 per cent on the prior comparable period. But the key point I'd note is that the underlying franchise in all
four of our businesses continued to grow through this period and the contributors - there were three large contributors that I'll go through as I speak to each Group.
Starting with Macquarie Asset Management, you'll see as we go through the
presentation that our underlying assets under management are up, equity under
management in private markets and the public investments assets. As a result, our bases and our performance fees were broadly in line with the prior comparable period.
The main contributor to the result being down substantially on the prior comparable period in Macquarie Asset Management was the timing of the realisation of assets in the Green Investments Group, plus an increase in operating expenses. But the prior comparable period, first half last year, we had some material realisations in our green investment assets, because it was a very conducive period for realisation. In this first half, we are holding the bulk of those assets for a core renewable fund that we're launching in Macquarie Asset Management, which strategically is a big opportunity for Macquarie Asset Management to go into adjacent real asset businesses. So, it's
important that we have this seed portfolio demonstrating our expertise to launch that well.
In the Banking and Financial Services, the result was up and we continue our underlying franchise growth. Just like in MAM with the assets under management growing, the loan books are growing, the platform funds are growing, the deposits are growing. Operating expenses, again, up and that's probably the second contributor to the change from the prior comparable period, as well as the timing of green investment realisation is that OpEx is up in all four groups. In BFS, we're investing a lot in technology and growing our platform and regulatory compliance.
In Macquarie Capital, the franchise again continues to grow. The fee income is broadly in line and the client base is growing there. Also, importantly, our private credit book continues to grow. So, while again we had large equity realisations in the first half last year, you may recall, the US real estate asset pillar, the European fibre network Onivia, a conducive environment of realisations. This time, less equity realisations, but more contribution from the annuity-style private credit investment income.
Then, commodities in global markets, the franchise there again continues to grow, so both in asset finance and financial markets we had solid contribution. Commodities, you'll see in Alex's analysis, the client numbers continue to grow. The main reason the result was down was because we experienced greater volatility in the first half of last year, particularly in European gas and power and in resources across coal, but also gold.
This period was a much quieter period in terms of volatility in underlying commodities, but the important thing is the franchise continues to grow.

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