Greg Ward Chief Financial Officer Overview of European operations - - PowerPoint PPT Presentation

14 September 2007 Presentation to investors and analysts

Greg Ward

Chief Financial Officer

Overview of European operations

European focus operational briefing and general update

26

A brief history of Macquarie in Europe

1989: First European presence in London and Munich

Institutional Stockbroking teams hired

1996: London

Project Finance

1999: London

Investment Banking Funds Futures

2000: London

Advisory Equity derivatives

2002: London

Macquarie Capital

2001: Frankfurt

• ffice opens

Corporate Advisory

2003: Dublin

• ffice
• pens

Macquarie Capital

Vienna

• ffice opens

Financial Products

Paris

Corporate Advisory

2006: Zurich

• ffice
• pens

Financial Products

1989 1998 2007

London

Corona Energy acquisition

Vienna

Macquarie Capital

1994: London

London branch established Foreign Exchange Macquarie Research

1991: London

Structured Finance

2005: Rome and Milan

• ffices open

Obtained Italian banking licence Mortgages

London

Energy trading

2004: Geneva and Paris

Institutional Stockbroking (ING) London Real Estate – MGPA JV

Munich

Equity derivatives

Amsterdam

• ffice opens

Corporate Advisory

2007: Moscow

Macquarie Renaissance JV

London

Real Estate

Manchester

• ffice
• pens

Real Estate

Paris

Investment Banking Funds

27

Macquarie European locations and staff*

• 12 office locations in 8 countries
• Over 1,000 staff, 25% of international

staff

• Regional base in London
• Representation from all of Macquarie’s
• perating Groups

dÉêã~åó 31 staff jìåáÅÜ cê~åâÑìêí cê~åÅÉ 13 staff m~êáë ^ìëíêá~ 13 staff sáÉåå~ pïáíòÉêä~åÇ 8 staff dÉåÉî~ wìêáÅÜ rh 883 staff içåÇçå j~åÅÜÉëíÉê fêÉä~åÇ 11 staff aìÄäáå fí~äó= 98 staff jáä~å

• çãÉ

kÉíÜÉêä~åÇë 2 staff ^ãëíÉêÇ~ã

* At 31 Aug 07. **Joint venture staff in Moscow not included in headcount. No Macquarie office in Moscow

• ìëëá~GG=

jçëÅçï=EgsF

28

Focused businesses in Europe

• Infrastructure and specialist funds management
• Corporate finance & advisory services
• Financial products
• UK investment funds (Open Ended Investment Company)
• Lending and asset financing
• Institutional cash equities & research
• Treasury and commodities activities
• Equity structured finance and derivatives
• Real estate structured finance
• Real estate advisory and funds management
• Residential mortgages
• Business banking services
• Funds management

29

European income* growth

200 400 600 800 1,000 1,200 1,400 1,600 '03 '04 '05 '06 '07

($Am)

European staff growth by Group

200 400 600 800 1000 1200 '03 '04 '05 '06 '07 Aug- 07

Headcount

Service areas FMG FSG REG EMG BSG T&C IBG

Growth in income and staff

Years ended 31 March * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses.

30

Treasury and Commodities Group

• Metals and Energy Capital

— 24hr precious and base metals trading desks operated from Sydney and London, offering spot, forward and option based risk management products. — Member of the London Metals Exchange offering clients trading and clearing services over LME contracts. — Provider of finance to upstream energy companies via equity, mezzanine and senior debt. — Recent initiatives include provision of a substantial loan facility to a Central Asian petroleum explorer.

• Agricultural Commodities and Investor Products

— Risk management solutions for sophisticated producers, consumers and merchants of agricultural commodities. — Commodity pre-export and inventory financing programs. — Structured derivatives over various commodity indices for the institutional investment community and financial intermediaries. — Dry freight derivatives (Forward Freight Agreements (FFA's) and options over FFA's).

31

Treasury and Commodities Group

• Energy Markets

— Risk management and financing solutions in energy products (oil, refined products, natural gas & coal). — Physical gas and coal trading. — Corona Energy, natural gas supply to industrial and commercial customers in the UK. — Recent initiatives include the expansion of the UK physical gas supply business into Europe.

• Futures

— Full service futures global execution, clearing, Direct Market Access and margin financing services to the UK and Europe — Specialist in Freight Clearing with full coverage to the Norwegian Clearing House, London Clearing House, and Singapore exchanges. — Daily management of UK/European Exchanges and clients, including Euronext LIFFE, Euronext LTOM and CME & CBOT clearing.

32

Equity Markets Group

Equity Markets Group operates three businesses in Europe:

• Equity linked products

— Provides equity-linked investment products for high net worth individuals and wholesale clients — Services clients in all major European markets from offices in London and Munich — Bespoke transactions, which may include convertible instruments, warrants and options

• Equity finance

— Principally, the stock lend & borrow business

• Trading

— Manages market risk for EMG’s businesses and trades arbitrage opportunities — Growth across the business - staff numbers have more than doubled over the past 12 months

33

Banking and Securitisation, Financial Services and Funds Management Groups

• Banking and Securitisation

— Residential mortgages — Entered Italy in 2005 — Branches in Milan and Rome with 10 other regional sales points across Italy — Portfolio of €718m* with approximately 100 staff — Mortgages distributed through both third party and direct channels — Recent initiatives — Business banking — Start-up business established in 2007 — Provide business lending services to UK insurance broking industry — Plans to expand product offering, including insurance premium funding

• Funds Management Group - building management capabilities in London for global fixed income,

European listed property and European private equity funds

• Financial Services Group - exploring opportunities to replicate niche product expertise in the region

* At 31 August 2007

34

Specialist fund capital raisings

$Ab 2 4 6 8 10 12 14 16 18 20 22

FY07 Apr - Aug 07

Region FY07 Raising ($Ab) Africa & Middle East 0.49 3.33 4.49 5.20 8.13

$A21.6b

• 1 Apr – 31 Aug

Raising ($Ab) Asia Pacific 5.80 Australia 2.81

TOTAL $A12.4b

Americas 1.80 Europe 2.06

Funds raised by Macquarie and joint venture fund manager partners, including equity raised via DRP. Including committed, uncalled capital. Capital raised includes approx. A$1b of Exchangeable Convertible Bonds (ECBs) issued by MCG

• $A21.6b raised over the 12 months to 31 March 07;

— 79% from international investors — 87% for unlisted funds or syndicates

• $A12.4b raised over the 5 months to 31 August 07;

— 77% from international investors — 77% for unlisted funds or syndicates

35

UK licenced banking entity

• In conjunction with establishment of Macquarie Group Limited (NOHC), FSA regulated entities

have been split between Banking and Non-Banking groups.

• The Non-Banking group will use the existing FSA regulated entities - Macquarie Europe Limited & Macquarie

Investment Management (UK) Limited

• Therefore seeking to establish UK licensed banking entity as the platform for future growth for regulated

European ‘Banking’ businesses

• As previously advised, application lodged with FSA in July 2007
• FSA has approximately 6 months to approve
• Expect to be operational by April 2008
• All major ‘Banking Group’ businesses will be represented
• Approximately 100 staff initially
• Subsidiary of Macquarie Bank Limited
• Will be appropriately capitalised
• Will seek independent ratings in due course
• Will have its own Board and Executive Committee

36

International head count growth

500 1000 1500 2000 2500 3000 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07

Business Head Count

0% 5% 10% 15% 20% 25% 30%

Support Head Count as a % of total Business Head Count

Business headcount Risk and operational staff as % of business head count

International growth is complemented by the roll-out of prudential framework Control of Compliance, Financial Operations and Risk Management functions retained by Head Office, complimented with strong regional management

Managing our international growth

37

Managing our international growth

• Same rules apply as in domestic market
• Timely and comprehensive reporting on compliance and risk matters
• Internal Audit devotes more resources to international businesses
• Frequent senior management visits to international offices
• Controls over trading payments largely centralised in Sydney
• Lending and trading activities concentrated in certain offices
• Increasing awareness of Macquarie brand internationally is improving our ability to

attract high quality staff

14 September 2007 Presentation to investors and analysts

Greg Ward

Chief Financial Officer

Q&A

European focus operational briefing and general update