investors and analysts Result announcement for the half year ended - - PowerPoint PPT Presentation

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Presentation to investors and analysts

Result announcement for the half year ended 30 September 2013

1 November 2013

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The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie‟s activities current as at the date of this presentation. This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Macquarie‟s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements. Macquarie does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Macquarie‟s control. Past performance is not a reliable indication of future performance. Unless otherwise specified all information is for the half year ended 30 September 2013. Certain financial information in this presentation is prepared on a different basis to the Macquarie Group Limited Financial Report, which is prepared in accordance with Australian Accounting

• Standards. Where financial information presented within this presentation does not comply with Australian Accounting Standards, a reconciliation to the statutory information is provided.

This report provides further detail in relation to key elements of Macquarie Group Limited‟s financial performance and financial position. It also provides an analysis of the funding profile of the Group because maintaining the structural integrity of the Group's balance sheet requires active management of both asset and liability portfolios. Active management of the funded balance sheet enables the Group to strengthen its liquidity and funding position. Any additional financial information in this presentation which is not included in the Macquarie Group Limited Financial Report was not subject to independent audit or review by PricewaterhouseCoopers.

Disclaimer

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01.

Introduction – Karen Khadi

02.

Overview of Result – Nicholas Moore

03.

Result Analysis and Financial Management – Patrick Upfold

04.

Outlook – Nicholas Moore

05.

Additional Information

Agenda

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01

Introduction

Karen Khadi

Head of Investor Relations

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02

Overview of Result

Nicholas Moore

Managing Director and Chief Executive Officer

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• 1. As at 30 Sep 13. Excludes ING Investment Management Korea AUM of $A25b, which MFG entered into an agreement to acquire during 1H14, subject to certain closing conditions, including regulatory approval. 2. As at 30 Sep 13.

Macquarie Funds

• Top 50 global asset manager with $A380.7b1 of assets under management
• Provides clients with access to a diverse range of capabilities and products, including infrastructure and real asset management, securities investment

management and fund and equity based solutions

Corporate and Asset Finance

• Provider of specialist finance and asset management solutions, with $A24.6b2 of loans and assets under finance
• Global capability in corporate and real estate credit investing and lending
• Expertise in asset finance including aircraft, motor vehicles, technology, healthcare, manufacturing, industrial, energy, rail and mining equipment

Banking and Financial Services

• Brings together Macquarie‟s retail banking and financial services businesses
• Provides a diverse range of personal banking, wealth management and business banking products and services to retail customers, advisers, brokers and

business customers

Macquarie Securities

• Global institutional securities house with strong Asia-Pacific foundations covering sales, research, ECM, execution and derivatives activities
• Full-service cash equities in Australia, Asia, South Africa and Canada with specialised offerings in US and Europe. Specialised derivatives offerings in key

locations globally

• Key specialities: Infrastructure and Utilities, TMET, Resources (mining and energy), Industrials and Financial Institutions

Macquarie Capital



Global corporate finance capability, including M&A, debt and equity capital markets, and principal investments



Key specialities in six industry groups: Infrastructure, Utilities and Renewables; Resources (mining and energy); Real Estate; TMET; Industrials and Financial Institutions

Fixed Income, Currencies and Commodities

• Global fixed income, currencies and commodities provider of finance, risk solutions and market access to producers/consumers and financial

institutions/investors

• Growing presence in physical commodities (natural gas, LNG, NGLs, power, oil, coal, base metals, iron ore, sugar and freight)
• Predominant in US and Australia, niche offering in Canada and Latin America, growing presence in Asia and EMEA
• Specialities: commodities, Asian and emerging markets, high yield and distressed debt

About Macquarie

Building for the long term

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• Net profit of $A501m, up 39% on 1H13 and up 2% on 2H13
• Operating income $A3.7b, up 20% on 1H13 and up 2% on 2H13
• Macquarie‟s annuity-style businesses (Macquarie Funds Group, Corporate and Asset Finance, and Banking and Financial

Services) continued to perform well with 1H14 combined results up 24% on 1H13 and up 15% on 2H13

• Macquarie‟s capital markets facing businesses‟ (Macquarie Securities, Macquarie Capital, and Fixed Income, Currencies and

Commodities) combined results up significantly on 1H13 and down 25% on 2H13 – Macquarie Securities and Macquarie Capital experienced improved activity levels in ECM, although M&A continued to be subdued – FICC impacted by further impairments in MEC, reflecting continued weak investor sentiment and confidence in resource equity markets

• Operating expenses $A2.9b, up 13% on 1H13 and up 6% on 2H13
• Effective tax rate of 38.0%, in line with FY13
• EPS $A1.50, up 42% on 1H13 and up 3% on 2H13
• Return on equity 8.7%, up from 6.6% in 1H13 and down from 8.9% in 2H13
• 1H14 dividend of $A1.00 (40% franked), up on 1H13 dividend of $A0.75 (unfranked) and down on 2H13 dividend of $A1.25

(40% franked)

1H14 Result

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Sep 13 v Sep 12 Sep 13 $Am Mar 13 $Am Sep 12 $Am

Net operating income  20% 3,679 3,603 3,054 Total operating expenses  13% (2,869) (2,715) (2,537) Operating profit before income tax  57% 810 888 517 Income tax expense  97% (307) (377) (156) Profit attributable to non-controlling interests (2) (21) – Profit attributable to MGL shareholders  39% 501 490 361

1H14 Result

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Financial performance

1H14 Profit of $A501m

1H14 up 39% on 1H13

1H14 EPS of $A1.50

1H14 up 42% on 1H13

1H14 Operating income of $A3,679m

1H14 up 20% on 1H13

1H14 DPS of $A1.00

1H14 up 33% on 1H13

2,000 3,000 4,000 2H11 1H12 2H12 1H13 2H13 1H14

$Am

0.00 0.50 1.00 1.50 2H11 1H12 2H12 1H13 2H13 1H14

$A

0.00 1.00 2H11 1H12 2H12 1H13 2H13 1H14

$A

200 400 600 2H11 1H12 2H12 1H13 2H13 1H14

$Am

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Assets under management of $A385 billion1

• AUM increased $A38b or 11% since 31 Mar 13, primarily driven by favourable currency and market movements, as well as

fund raisings and investments in the infrastructure and real assets business

$Ab

• 1. As at 30 Sep 13. Excludes ING Investment Management Korea AUM of $A25b, which MFG entered into an agreement to acquire during 1H14, subject to certain closing conditions, including regulatory approval.

50 100 150 200 250 300 350 400 Mar 10 Mar 11 Mar 12 Mar 13 Sep 13 Fixed income Direct infrastructure Equities Cash Direct real estate Currency Other

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PAGE 11 Europe Amsterdam Dublin Frankfurt Geneva London Luxembourg Moscow Munich Paris Vienna Zurich Australia Adelaide Albury Brisbane Canberra Gold Coast Melbourne Perth Sunshine Coast Sydney New Zealand Auckland Christchurch Wellington Canada Calgary Edmonton Guelph Montreal Ottawa Greater Toronto Vancouver Victoria Waterloo USA Atlanta Austin Boston Carlsbad Chicago Denver Detroit Houston Irvine Latin America Mexico City Ribeirao Preto Sao Paulo Middle East Abu Dhabi Dubai South Africa Cape Town Johannesburg Los Angeles Nashville New York Philadelphia Rolling Meadows San Diego San Francisco San Jose Asia Bangkok Beijing Gurgaon Hong Kong Hsin-Chu Jakarta Kuala Lumpur Manila Mumbai Seoul Shanghai Singapore Taipei Tokyo

Europe, Middle East & Africa2

Income: $A741m (21% of total) Staff: 1,199

Americas

Income: $A1,162m (32% of total) Staff: 3,255

Australia3

Income: $A1,204m (34% of total) Staff: 6,167

• 1. Operating income net of impairment charges for the half year to 30 Sep 13. Net operating income in each region excludes income from the Corporate segment. 2. Excludes staff in Macquarie First South joint venture and staff seconded to

Macquarie Renaissance joint venture (Moscow). 3. Includes New Zealand.

Diversified by region

International income1 66% of total Total staff 13,901; International staff 56% of total

Asia

Income: $A485m (13% of total) Staff: 3,280

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• 1. Operating income net of impairment charges for the half year to 30 Sep 13. Net operating income in each region excludes income from the Corporate segment.

$Am

Diversified income

Net operating income by region

• 66% of operating income1 in 1H14 is generated offshore
• FX movements estimated to have ~5% favourable impact on the 1H14 result compared to both 1H13 and 2H13

200 400 600 800 1,000 1,200 1,400 1,600 Australia Asia Americas Europe, Middle East & Africa

1H12 2H12 1H13 2H13 1H14

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AUM of $A380.7b1 up 13% on 1H13 and up 11% on 2H13

Macquarie Infrastructure and Real Assets Macquarie Investment Management Macquarie Specialised Investment Solutions Activity

• Raised $A3.2b in new equity commitments, including:

–

$US1.1b Asian Pay Television Trust IPO

–

MIP3 first close with $US1.3b in investor commitments, the largest first close for a MIRA fund to date, with 60% of commitments from existing investors in prior MIRA funds

• In addition, €2.75b2 in investor commitments for MEIF4
• Invested over $A1.5b of equity across 11 acquisitions in 7

countries, including first Philippines acquisition, infrastructure investments in the US, Mexico, Korea and China, real estate investments in Mexico and China, and agricultural investments in Australia and Brazil

• Divested managed assets of over $A6.1b, including $US4.8b

divestment of Global Tower Partners and the listing of Taiwan Broadband Communications on SGX

• Strong performance fees of over $A65m, predominantly

from Macquarie Infrastructure Company and Macquarie Atlas Roads

• $A7.3b of equity to deploy as at 1H14
• Exited 56% interest in MGPA
• Awarded Infrastructure Journal “Acquisition of the year –

Energy” for MEIF4 consortium‟s acquisition of Open Grid Europe and Macquarie was recognised as the world‟s largest manager of alternative assets (Towers Watson) Activity

• Increase in AUM mainly driven by FX and market movements

–

Shift in AUM mix towards higher margin products continues to drive an increase in run rate revenue

• Entered into an agreement to acquire ING Investment Management

Korea from ING Group, a top 10 asset manager in Korea with AUM of KRW 24.1 trillion3 (approx. $A25b)

• Strong performance across a range of asset classes relative to industry

benchmarks and peers, with the majority of funds outperforming their benchmarks over three years

• Macquarie Asian Alpha Fund awarded Best Market Neutral Fund at the

2013 Australian Hedge Fund Awards

• MIM‟s flagship Australian fixed income retail strategies collectively

reached $A3b in FUM, and the IFP Global Franchise Fund exceeded $A1b in FUM

• Launched Listed Equities China New Stars and Asia ex-Japan MID cap

strategies; expanding Emerging Markets Debt capabilities

• Continued to strengthen the global distribution team. Now managing

more than $A14b in cross-border AUM. Selective distribution highlights include:

–

Several large institutional mandate wins globally, across a range of fixed income, currency, equity and absolute return strategies, particularly in the US, Australia and Asia

–

Active equities AUM at record high of $A72b, from strong growth in US Value, US Growth, Emerging Markets and Asian equities

–

Strong inflows into the Macquarie European Alpha Strategy

–

Strong net wholesale inflows in Australia Activity

• Raised over $A400m for Australian retail capital

protected investments

• Realisation of the first hedge fund seeded in the

fund incubation business

Macquarie Funds

Operating income of $A907m, up 25% on 1H13 and up 15% on 2H13 Net profit contribution of $A500m, up 40% on 1H13 and up 25% on 2H13

Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

• 1. As at 30 Sep 13. Excludes ING Investment Management Korea AUM of $A25b, which MFG entered into an agreement to acquire during 1H14, subject to certain closing conditions, including regulatory approval. 2. Included within new equity

commitments raised in FY13 however fund closings occurred in Apr 13. 3. As at 30 Sep 13.

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Corporate and Asset Finance

Operating income of $A578m, up 14% on 1H13 and up 6% on 2H13 Net profit contribution of $A396m, up 18% on 1H13 and up 10% on 2H13

Asset and loan portfolio of $A24.6b1 at 1H14, up 15% on 1H13 and up 10% on 2H13

Corporate Lending Asset Finance

• Lending‟s funded loan portfolio totalled $A8.8b2 at 1H14 – up

11% on 2H13, mainly due to FX movements

• $A1.8b of portfolio additions for 1H14, comprising:

–

$A0.8b of new primary financings across corporate and real estate, weighted towards bespoke originations

–

$A0.6b of corporate loans and similar assets acquired in the secondary market

–

$A0.4b of commercial real estate loans acquired in the secondary market



Notable transactions included:

–

Refinancing and capital restructure of Energetics, a UK provider of utility connections

–

The $US145m acquisition of a portfolio of US windfarm preference equity financings



Prepayment and realisation income included:

–

Realisation of the exposure to Sunseeker, a UK manufacturer

• f luxury yachts

–

Prepayment of the majority of a German mortgage portfolio

• Portfolio continued to generate very attractive return levels, and

asset quality remained sound

• Asset Finance portfolio totalled $A15.8b at 1H14 – up 9%
• n 2H13 mainly due to FX movements
• Motor vehicle leasing portfolio of $A7.6b up 4% on 2H13.

Total contracts in excess of 250,000

• Ongoing expansion of motor vehicle and equipment

finance channels

• Extending finance through the customer value chain – from

manufacturer to end user:

–

Motor vehicle, equipment, technology, energy and mining sectors

• Established Macquarie Rotorcraft, a full-service helicopter
• perating leasing business
• Continued growth of metering portfolio in the UK, $A0.9b

at 1H14

• Mining equipment finance business continues to expand
• Aircraft leasing portfolio of $A3.5b at 1H14

Funding activity

• Strong securitisation activity continues with $A750m of motor vehicle and equipment leases and loans secured during 1H14
• Continued to access global securitisation markets

–

• Approx. $A16.2b of external funding since 2007

Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

• 1. Asset and loan portfolio growth as a result of FX movements is 9% on 1H13 and 7% on 2H13. 2. Portfolio breakdown by asset includes rundown RESF portfolio of $A0.2b.

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Customer numbers approx. 1.02 million, predominantly in Australia

Personal Banking

Wealth Management Business Banking

• Serves Personal Banking customers through strong

mortgage intermediary relationships and white-label arrangements, as well as direct Macquarie branded

• fferings

Activity

• Australian mortgage portfolio $A14.6b up 26% on 2H13,

which represents 1% of the Australian mortgage market

• Macquarie Mortgages named Lender of the Year (Tier 2)

at the annual Mortgage Choice national conference 2013

• Strategic distribution agreements in place with Jetstar for

the provision of both credit and prepaid cards

• Services agreement in place with Qantas for the

provision of Frequent Flyer points on credit cards and home loans

• Distribution agreement with Hilton for a co-branded credit

card

• Delivers products and services through institutional relationships, virtual

adviser networks and dedicated direct relationships with our clients Activity

• No.1 ranked full-service retail stockbroker in Australia in terms of

volume and market share2

• ASX retail turnover up 4% on 1H13 and down 1% on 2H13
• Wrap platform FUA up 41% from 2H13 to $A35.3b which includes

migration of the Perpetual platform

• Macquarie Life Inforce risk premiums $A171m up 22% on 1H13 and up

11% on 2H13

• Sale of Macquarie Private Wealth Canada to Richardson GMP

expected to complete in Nov 13 subject to customary regulatory approvals

• Macquarie CMA won two categories – SMSF advising financial

planners and SMSF advising accountants - at Core Data SMSF Service Provider Awards 2013

• Macquarie named Blue Ribbon Smart Investor Awards - Super Platform
• f the Year (Insurance)3
• ASIC Enforceable Undertaking compliance project remains on track
• Serves business clients, ranging from sole practitioners to

corporate professional firms, who we engage with through dedicated relationship managers Activity

• Average loan volumes up 21% on 1H13 and up 17% on

2H13

• DEFT transactions up 19% by volume and up 20% by

value on 1H13 and up 7% by volume and up 11% by value on 2H13

• Australian customer numbers up 91% on 1H13 and up

75% on 2H13 due primarily to the acquisition of Pacific Premium Funding Deposits

• Total retail deposits of $A33.1b up 7% on 1H13 and up 7% on 2H13
• CMA balance of $A18.8b up 9% on 1H13 and up 7% on 2H13

Banking and Financial Services

Operating income of $A667m (restated from $A696m1), up 2% on 1H13 and up 5% on 2H13 Net profit contribution of $A111m (restated from $A140m1), down 10% on 1H13 and down 7% on 2H13

Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

• 1. During the half year ended 30 Sep 13, Group Treasury revised internal funding transfer pricing arrangements relating to BFS‟s deposit and lending activities. Comparatives have been restated to reflect the current methodology. 1H14 operating income

and net profit contribution excludes the gain on sale of OzForex which will be recognised in 2H14. 2. IRESS: consideration traded and volumes; Macquarie: market segmentation Sep 13. 3. Fairfax Smart Investor Blue Ribbon Awards 2013.

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Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

• 1. Peter Lee Associates Survey of Asian/Australian Institutional Investors – Australian Equities. 2. Greenwich Survey - Australian Equities - US and European Institutional Investors. 3. IRESS - Institutional and retail market share. 4. Bloomberg league
• tables. 5. Dealogic. 6. Greenwich Survey – Asian Equities - US, European and Asian institutional investors. 7. Local exchanges. 8. Abel Noser 2013. 9. The Trade Asia. 10. Market share by NOIP „Net over intrinsic premium‟. 11. Bloomberg (using rank

function on the major names in each market for traded volumes excluding trading firms).

Macquarie Securities

Operating income of $A436m, up 42% on 1H13 and 23% on 2H13 Net profit contribution of $A71m up from a loss of $A64m in 1H13 and up from a profit of $A14m in 2H13

Market Conditions Australia Asia North America EMEA

Activity Activity Activity Activity

• Improved investor

sentiment and inflows into equities as an asset class from low levels

• Improved sentiment

led to an increase in ECM from subdued FY13

• Overall retail client

demand for derivatives remains at low levels, however trading conditions have improved

• Commissions up 20% on 1H13 and

in line with 2H13

• No.2 overall research and sales

strength for Australian institutional investors1, No.1 for Asian institutional investors1 and No.1 for US/European institutional investors2 into Australian equities

• Secondary market share 8.7% up

from 8.4% in 1H13 and in line with 2H133

• No.2 in Australian equity, equity

linked and rights tables4

• ECM market share of 35% up from

15% in 1H13 and 20% in 2H135

• Continued development of

institutional derivatives business complementing cash franchise

• Over 280 stocks under coverage
• Commissions up 37% on 1H13, and up 23% on 2H13
• No.10 overall research and sales strength for Asian

institutional investors6, No.6 for European institutional investors6 and No.4 for US institutional investors6 into Asian equities

• Secondary market share in Taiwan, Korea, India and

the Philippines are up however, Japan, Hong Kong Singapore and Indonesia are down on 1H13 and 2H137

• No.1 Asian Broker for execution quality 3rd year

running8

• Top ranked in provision of algorithmic trading services

in Asia9

• No. 7 in Asia Pacific Equity Offerings league tables4
• ECM market share of 1.4% up from 0.4% in 1H135 and

0.3% in 2H135

• Ceased issuing Korean equity linked warrants as a

result of new regulation

• No.1 market share in listed warrants in Singapore6, No.2

in Thailand6 and No.6 in Hong Kong10

• No.1 ranked GDR broker by market share in Indonesia

and Philippines. Top 3 ranked GDR broker by market share in India and Taiwan11

• Over 915 stocks under coverage
• US commissions up 17% on 1H13

and in line with 2H13

• Canadian commissions up 9% on

1H13, and up 29% on 2H13

• Canadian secondary market share of

1.4% up from 1.3% in 1H13 and 1.0% in 2H13

• No. 8 in Canadian equity and equity

linked league tables4

• Canadian ECM market share of 2.6%

up from 0.2% in 1H13, and up from 0.9% in 2H13

• Over 700 stocks under coverage
• European commissions up 11%
• n 1H13 and up 34% on 2H13
• European market share 0.8% up

from 0.7% in both 1H13 and 2H136

• South African market share of

2.8%, up from 2.6% in 1H13 and 2.5% in 2H136

• Continued cost reduction of

legacy activities as positions expire and infrastructure is decommissioned

• Over 300 stocks under coverage

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204 transactions valued at $A26b during the first half of the year (205 transactions valued at $A35b in 1H13 and 242 transactions valued at $A50b in 2H13)

Market Conditions Australia and New Zealand Asia EMEA Americas

• ANZ: M&A deal values

down ~30% on 1H13, flat

• n 2H13. ECM up ~35%
• n 1H13 and flat on

2H131

• Asia ex Japan: M&A

deal values flat on 1H13, M&A & ECM down 25%- 30% on 2H131

• EMEA: M&A deal values

down ~10% on 1H13 and flat on 2H131

• USA: market deal values

down ~10% on 1H13 and ~15% on 2H131

• Canada: market deal

values up ~15% on 1H13 and down ~15% on 2H131 Key achievements

• Investment Banking Firm of the

Year (Australia)2

• Ranked No.1 in Australia for

announced3 and completed4 M&A deals and No.2 in Australia for equity offerings4 Notable deals

• Joint lead manager on Mighty River

Power‟s $NZ1.7b partial IPO

• Joint bookrunner and joint lead

arranger on Alinta Energy‟s $A1.5b senior debt refinancing

• Adviser to Leighton Holdings on the

divestment of 70% of its telecoms assets at a sale price valuing 100%

• f the businesses at $A885m
• Other deals include: Ironbridge

(M&A), APA (M&A), NSW Department of Finance and Services (M&A) Key achievements

• Ranked No.1 in South East Asia and

No.3 in Singapore for announced M&A deals4 and No.4 IPO bookrunner in Asia Pacific (ex-Japan, ex-A-Share)4 Notable deals

• Joint issue manager, global coordinator,

bookrunner and underwriter on APTT‟s $US1.1b IPO on the SGX

• Sole global coordinator and bookrunner,

and lead manager on Alliance Global‟s $US371m secondary offering in Emperador

• Joint book running lead manager on

Adani Ports' $US182 million institutional placement in India

• Other deals include: Wuzhou (ECM),

Eulsukdo Bridge (Project Financing), Baring Private Equity Asia (M&A), China Animal Healthcare (M&A/DCM) Key achievements

• Global Infrastructure Acquisition of

the Year (UPP Group)5, Global Energy Acquisition of the Year (Open Grid)5 Notable deals

• Adviser, arranger and sponsor on

Blue Transmission‟s acquisition of the offshore transmission assets of Sheringham Shoal wind farm

• Adviser to Aquiline on the

acquisition of Equity Red Star, a Lloyd‟s of London niche motor insurer and subsidiary of IAG

• Adviser to Mainstream Renewable

Power on Marubeni‟s equity investment of up to €100m

• Other deals include: Tourism

Development and Investment Company PJSC (M&A), Bain Capital (M&A), Oystercatcher (DCM), FCC Construccion (M&A) Key achievements

• Ranked No.2 underwriter for public

Canadian oil & gas exploration and production companies3 Notable deals

• Adviser to WMS Industries on its

$US1.5b sale to Scientific Games, the largest ever M&A deal in the gaming supplier sector globally6

• Adviser to Trinity Industries on its

$US2.1b railcar leasing JV with Napier Park Railcar Leasing Fund

• Lead underwriter and sole

bookrunner on Surge Energy‟s $C248m prospectus offering and adviser on its $C240m asset acquisition

• Other deals include: American

Greetings (PCM/DCM), Atlantic Aviation (ECM/DCM), Carmike Cinemas (ECM), Beecher Carlson (M&A), Cenveo (M&A), Suncor Energy (M&A), TORC (M&A/ECM), BNK Petroleum (M&A)

Macquarie Capital

Operating income of $A372m, up 48% on 1H13 and down 10% on 2H13 Net profit contribution of $A101m up from a $A10m profit in 1H13 and down 28% on 2H13

Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs. 1.Dealogic based on estimates of deal values in USD. 2. M&A Advisor. 3. Bloomberg 1 Jan-30 Sep 2013 (by value). 4. Dealogic 1 Jan-30 Sep 13 (by value). 5. Infrastructure Journal. 6. Completion occurred in Oct 13.

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Commodity Markets (Physical & Financial) 60% of operating income1 Financial Markets (Primary & Secondary) 28% of operating income1 12% of operating income1 Metals & Energy Capital Metals & Agriculture Sales and Trading Energy Markets Fixed Income & Currencies Credit Trading Futures Activity

• Increased producer hedging

and trading opportunities in precious metals associated with volatile and falling prices

• Subdued activity in energy

finance with significant loan book run down on the back of strong competition in North America in particular

• Continued weak investor

sentiment and confidence in resource equity markets resulted in further impairments on some equity holdings Activity

• Lack of market volatility led to

lower client activity and limited trading opportunities in agricultural markets

• Low levels of volatility in base

metals markets dampened both trading results and client hedging activity

• Build out of financing of

physical activities progressing well Activity

• Strong results from US Gas

and Global Oil businesses

• Australian Power

experiencing continued growth

• Maintained ranking as No. 4

US physical gas marketer in North America2 Activity

• Improved volatility and

volumes in FX and interest rate markets

• Continued increased deal

flow in the UK and Australian securitisation and debt

• rigination business

Activity

• Credit trading volumes were

subdued across all asset classes as concerns around US monetary policy kept many participants on the sidelines

• Yields in US High Yield

markets increased during 1H14 as fears of tapering impacted trading results

• Increased opportunity to

provide single credit and portfolio solutions to institutional investors, despite lower flow trading volumes Activity

• Increased transactional

volumes in all key regions

• No.2 overall market share in

ASX24 Futures3

• Continued expansion of North

American and European client bases

• Increasingly diverse client

and product base

Fixed Income, Currencies and Commodities

Operating income of $A653m, up 13% on 1H13 and down 10% on 2H13 Net profit contribution of $A203m, down 7% on 1H13 and down 41% on 2H13

Note: All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

• 1. Percentages are based on operating income before impairment charges on investment securities available for sale and associates and joint ventures. 2. Platts Q2 2013. 3. ASX24 Futures volumes calendar YTD.

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• Diverse and stable funding base, minimal reliance on short term wholesale funding markets
• Surplus funding capacity continues to be deployed
• Total deposits1 increased to $A38.0b at Sep 13 from $A36.2b at Mar 13
• $A7.9b of new term funding raised since Mar 13

Strong funding and balance sheet position

• 1. These balances represent total deposits per the funded balance sheet, which differs from total deposits per the statutory balance sheet ($A42.7b at 30 Sep 13). The funded balance sheet excludes any deposits which do not represent a funding source

for the Group.

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Funded balance sheet remains strong

31 March 2013 30 September 2013 30 September 2012

$Ab $Ab 10 20 30 40 50 60 70 80 90 100 Funding sources Funded assets

Equity Investments and PPE (8%)

Loan assets > 1 year (33%) Loan assets < 1 year (10%) Trading assets (18%)

Self-Securitisations (5%)

Cash and liquid assets (26%) Debt maturing beyond 12 mths (34%) Equity and hybrids (13%) Retail Deposits (35%)

Other debt maturing in the next 12 mths (6%) Wholesale Deposits (6%) ST wholesale issued paper (6%)

$Ab

1 2 5 3 4

These charts represent Macquarie Group Limited‟s funded balance sheets at the respective dates noted above. For details regarding reconciliation of the funded balance sheet to the Group‟s statutory balance sheet, refer to slide 50. 1. „Other debt maturing in the next 12 mths‟ includes Structured Notes, Secured Funding, Bonds, Other Bank Loans maturing within the next 12 months and Net Trade Debtors. 2. „Debt maturing beyond 12 mths‟ includes Loan Capital. 3. „Loan Assets > 1 yr‟ includes Debt Investment Securities, Net working capital, and Operating Lease Assets. 4. „Self-Securitisations‟ includes repo eligible Australian mortgages originated by Macquarie. 5. „Equity Investments and PPE‟ includes the Group‟s co-investments in Macquarie-managed funds and equity investments.

10 20 30 40 50 60 70 80 90 100 Funding sources Funded assets

Equity and hybrids (14%) Debt maturing beyond 12 mths (27%) Retail Deposits (36%) Wholesale Deposits (5%) Other debt maturing in the next 12 mths (9%) ST wholesale issued paper (9%) Cash and liquid assets (23%) Self-Securitisations (7%) Trading assets (16%) Loan assets < 1 year (13%) Loan assets > 1 year (33%)

Equity Investments and PPE (8%)

1 2 5 3 4

10 20 30 40 50 60 70 80 90 100 Funding sources Funded assets

Equity and hybrids (14%) Debt maturing beyond 12 mths (28%) Retail Deposits (35%)

Wholesale Deposits (6%) Other debt maturing in the next 12 mths (11%) ST wholesale issued paper (6%) Equity Investments and PPE (8%)

Loan assets > 1 year (34%) Loan assets < 1 year (11%) Trading assets (17%) Self-Securitisations (7%) Cash and liquid assets (23%)

1 2 5 3 4

SLIDE 21

PAGE 21

• On market purchases since 31 Mar 13

– FY13 MEREP $A216m at a weighted average price of $A43.56 – 2H13 DRP $A81m at a weighted average price of $A43.43

• On 7 Jun 13, $A600m Macquarie Group Capital Notes (MCNs) were issued in replacement of the $A600m

Convertible Preference Securities which were redeemed 1 Jul 13. The MCNs were issued by MGL and will receive 100% transitional treatment under the forthcoming APRA conglomerates proposals

• In May 13, APRA issued its draft rules for Conglomerates. Whilst the rules are yet to be finalised, our current

assessment is that Macquarie has sufficient capital to meet the minimum APRA capital requirements for Conglomerates, which will be effective from 1 Jan 15

• APRA is yet to publish standards relating to the leverage ratio, requirements for which will apply to MBL only

– Disclosure required from 1 Jan 15 – Based on draft BIS leverage ratio requirements, MBL is well in excess of the Basel III 3% minimum, with an estimated 5.5%1 leverage ratio

Capital Management Strategy update

• 1. As at 30 Jun 13.

SLIDE 22

PAGE 22

• Subject to shareholder approval, Macquarie proposes to distribute to its shareholders one stapled security in ASX listed Sydney Airport (SYD)

for each Macquarie ordinary share held. This amounts to approximately 340m SYD securities

• If approved, the impact of the distribution on Macquarie would be:

– A gain on distribution will be recognised in the income statement on the distribution date based on SYD‟s closing share price on the trading day prior to distribution (which is expected to be 10 Jan 14). Based on SYD‟s closing share price of $A4.17 on 30 Oct 13, the gain on distribution would be approximately $A377m – AVS equity investments on the balance sheet will be reduced by the market value of the SYD securities distributed to shareholders. The carrying value of the 340m units in SYD as at 30 Oct 13 is $A1.4b – APRA Basel III regulatory capital surplus is expected to reduce by approx. $A250m after taking into account the release of capital currently held against the investment, profit on distribution and certain other capital initiatives (the majority of which have been completed or are under contract to be completed) – Expected reduction in capital surplus is consistent with the outstanding balance of the ordinary share buyback previously announced – If the proposal is implemented, the outstanding buyback will be cancelled

• Following the distribution, Macquarie also proposes a share consolidation on a 0.9438 for one basis to adjust for the capital reduction
• A sale facility will be established for small and ineligible shareholders
• A shareholder meeting to approve the distribution, including a change to Macquarie‟s Constitution to facilitate the proposal and provide greater

flexibility for payments of distributions in the future, is scheduled for 12 Dec 13. If approved the distribution of SYD securities to eligible shareholders is expected to occur on 13 Jan 14

Proposed distribution of SYD securities to Macquarie shareholders

SLIDE 23

PAGE 23

• 1. Calculated at 7% RWA. 2. „Harmonised‟ Basel III estimates assume alignment with BIS in areas where APRA differs from the BIS. 3. Includes 1H14 P&L net of FY13 dividend and Share Based Payment reserve movement. 4. Includes

the net impact of hedging employed to reduce the sensitivity of the Group‟s capital position to FX translation movements. 5. APRA Basel III „super-equivalence‟ includes full CET1 deductions of equity investments ($A0.7b); deconsolidated subsidiaries ($A0.4b); DTAs and other impacts ($A0.3b).

• APRA Basel III Group capital of $A13.7b, Group surplus of $A3.1b at Sep 131
• Pro forma Group surplus of $A2.8b1 post in specie distribution of SYD and other capital initiatives

Stable Basel III capital position

3.5 3.5 2.1 1.8 4.4 4.5 3.1 2.8 0.2 0.1 (0.2) (1.4) (0.3) 0.0 1.0 2.0 3.0 4.0 5.0 Harmonised Basel III at Mar 13 Net Capital Generation FY13 MEREP Other Harmonised Basel III at Sep 13 APRA Basel III 'super equivalence' APRA Basel III at Sep 13 In-specie distribution

• f SYD and other

capital initiatives Pro forma APRA Basel III at Sep 13

Group regulatory surplus: Basel III (Sep 13)

Group regulatory surplus at 7% RWAs Group regulatory surplus at 8.5% RWAs

Based on 8.5% (minimum Tier 1 ratio + CCB), which is not required by APRA until 2016

$Ab

4 2 3 5

SLIDE 24

PAGE 24

• 1H14 dividend set at $A1.00, 67% payout ratio

– 1H14 dividend up on 1H13 dividend of $A0.75 (unfranked) and down on 2H13 dividend of $A1.25 (40% franked) – 1H14 dividend is 40% franked

• Dividend Reinvestment Plan shares for the 1H14 dividend to be sourced on market

Interim Dividends

SLIDE 25

PAGE 25

Board changes

• John Niland has notified the Board of his intention to retire as a Director of Macquarie Group Limited and

Macquarie Bank Limited, effective from 31 December 2013

• Gary Banks and Patricia Cross joined the Boards of Macquarie Group Limited and Macquarie Bank Limited on

1 August and 7 August 2013 respectively

John has served as a Non-Executive Director since February 2003. He currently chairs the Board Governance and Compliance Committee and is a member of the Board Remuneration Committee and Board Risk Committee. Gary Banks heads the Australia and New Zealand School of Government and was Chairman of the Productivity Commission from its inception in 1998 until 2012. He holds or has held roles with the OECD, the GATT Secretariat, the World Bank and the WTO. He brings deep experience across economics, public policy and regulation in Australia and internationally Patricia Cross has served as a Non-Executive Director on a range of boards over the past 17 years. She has extensive financial services experience, having held senior executive roles with Chase Manhattan Bank and Chase Investment Bank, Banque Nationale de Paris and National Australia Bank

SLIDE 26

03

Result analysis and financial management

Patrick Upfold

Chief Financial Officer

SLIDE 27

PAGE 27

Income Statement key drivers

Sep 13 $Am Mar 13 $Am Sep 12 $Am Net interest and trading income 1,451 1,402 1,199 Fee and commission income 1,838 1,743 1,636 Share of net gains of associates 70 17 75 Investment impairments (82) (168) (220) Loan impairments (95) (101) (88) Other income 497 710 452 Net operating income 3,679 3,603 3,054 Employment expenses (1,730) (1,735) (1,538) Brokerage, commissions and trading- related expenses (379) (284) (320) Other operating expenses (760) (696) (679) Total operating expenses (2,869) (2,715) (2,537) Net profit before tax and non-controlling interests 810 888 517 Income tax expense (307) (377) (156) Non-controlling interests (2) (21)

• Net profit after tax

501 490 361

• Net interest and trading income up 21% on 1H13

– Increased lending volumes in CAF and BFS – Improved trading conditions for Macquarie Securities – Increased client activity in FX and precious metals markets – Favourable effect of weaker AUD

• Fee and commission income up 12% on 1H13

– Increased base fees from growth in AUM – Higher market volumes and improved market share in cash equities – Improved ECM revenue, partially offset by weaker M&A income

• Investment impairments well down on 1H13 and 2H13

– Resource equity investments continue to be impacted by weak investor sentiment

• Other income up 10% on 1H13 but down on a strong 2H13 that included a

significant gain on the reclassification of an investment in an associate to an available for sale investment

• Employment expenses up 12% on 1H13

– Improved result leading to higher staff compensation – Increased headcount – Weaker AUD

• Other operating expenses up 12% on 1H13, driven by increased activity and

weaker AUD

• Effective tax rate of 38%, consistent with FY13 – higher than Australian corporate

tax rate of 30% due to geographic mix of income and tax uncertainties

SLIDE 28

PAGE 28

Macquarie Funds

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Base fees 610 509 480 Performance fees 75 88 76 Other fee and commission income 120 181 108 Net interest and trading income1 (5) (7) 7 Share of net gains/(losses) of associates 47 (12) 48 Equity investment and other income 49 33 22 Impairment charges2 5 (10) (25) Internal management revenue3 6 7 9 Net operating income 907 789 725 Total operating expenses (407) (390) (370) Non-controlling interests

• 1

Net profit contribution4 500 399 356 AUM5 ($Ab) 380.7 343.5 336.8 Staff numbers 1,445 1,472 1,425

• 1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group‟s statutory P&L. 2. Includes investment and loan impairments. 3. Internal revenue allocations are

eliminated on consolidation in the Group‟s statutory P&L. 4. Management accounting profit before unallocated corporate costs, profit share and income tax. 5. As at 30 Sep 13. Excludes ING Investment Management Korea AUM of $A25b, which MFG entered into an agreement to acquire during 1H14, subject to certain closing conditions, including regulatory approval.

• Base fees up 27% on 1H13 to $A610m

– AUM up 13% on 1H13 – MIRA driven by new fund raisings, deployment of equity, favourable currency movements and increased equity values, partially offset by asset disposals – MIM driven by favourable currency movements, increased market valuation, positive underlying fund flows into higher fee earning equities and full impact of fees from Professional Series (transferred from BFS 1 Oct 12)

• Performance fees broadly in line with 1H13

– Macquarie Infrastructure Company LLC, Macquarie Atlas Roads outperformed their respective benchmarks

• Other fee and commission income of $A120m up 11% on 1H13

– Includes distribution service fees, structuring fees, capital protection fees and income from True Index products – 2H13 included significant fee income earned on the internalisation of the DUET Group and the IPO of a Mexican REIT

• Share of net gains/(losses) of associates of $A47m includes gains arising from an

increase in the valuation of real estate assets

• Equity investment and other income of $A49m up 123% on 1H13 due to gains on sale of

listed investments and higher dividend income

• Total operating expenses up 10% on 1H13, primarily driven by foreign exchange rates

and higher brokerage, commission and trading-related expenses consistent with higher revenues

SLIDE 29

PAGE 29

Corporate and Asset Finance

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Net interest and trading income1 277 328 251 Fee and commission income 7 25 16 Net operating lease income 255 212 203 Impairment charges2 (29) (39) (19) Other income 60 15 52 Internal management revenue3 8 4 4 Net operating income 578 545 507 Total operating expenses (182) (186) (172) Non-controlling interests – – – Net profit contribution4 396 359 335 Loan and finance lease portfolio ($Ab) 18.9 17.3 16.9 Operating lease portfolio ($Ab) 5.7 5.1 4.5 Staff numbers 976 957 928

• Net interest and trading income of $A277m up 10% on 1H13

– Lending up 14% largely due to the effect of weaker AUD (2H13 includes significantly higher level of early loan realisations) – Finance lease portfolio volumes (predominantly motor vehicles) up 10% – Partially offset by funding costs associated with increased operating lease portfolio (including FX impact)

• Net operating lease income of $A255m up 26% on 1H13 due to the favourable

impact of the depreciation of the AUD and full impact of European Rail acquisition (Jan 13)

• Other income of $A60m up 15% on 1H13

– Favourable settlement of a claim and additional lease termination income in relation to the UK energy leasing business – Realisation of an equity exposure in the Lending business

• Total operating expenses up 6% on 1H13 to $A182m driven by headcount

growth combined with the impact of the weaker AUD

• 1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group‟s statutory P&L. 2. Includes investment and loan impairments. 3. Internal revenue allocations are

eliminated on consolidation in the Group‟s statutory P&L. 4. Management accounting profit before unallocated corporate costs, profit share and income tax.

SLIDE 30

PAGE 30

Banking and Financial Services

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Restated1 Net interest and trading income2 366 331 311 Platform and other fee and commission income 211 198 233 Brokerage and commissions 106 111 103 Impairment charges3 (23) (17) (26) Other income 7 13 34 Net operating income 667 636 655 Total operating expenses (556) (517) (531) Net profit contribution4 111 119 124 FUM / FUA5 ($Ab) 136.8 123.0 120.1 Loan portfolio ($Ab) 25.7 22.9 23.2 Retail Deposits ($Ab) 33.1 31.0 30.8 Staff numbers 2,891 2,848 2,922

• Net interest and trading income of $A366m up 18% on 1H13

– Strong loans and deposit growth in Business Banking, including volume growth in Macquarie Premium Funding from acquisition of Pacific Premium Funding business (Mar 13) – Australian mortgages increased to $A14.6b from $A10.9b on 1H13 – CMA increased to $A18.8b from $A17.3b on 1H13

• Platform and other fee and commission income down 9% on 1H13

– Reduction due to the sale of the COIN institutional business (Aug 12) and transfer of Professional Series to MFG (Oct 12), partially offset by an increase in income from Wrap as a result of Perpetual contract (Apr 13) and increased market valuations

• Brokerage and commissions broadly flat reflecting weak retail volumes
• Other income of $A7m significantly down on 1H13, which included gains on sale of

the Canadian Macquarie Premium Funding business (May 12) and the COIN institutional business (Aug 12)

• Total operating expenses up 5% on 1H13

– Increase in brokerage and commission expense due to volume growth in Macquarie Premium Funding from acquisition of Pacific Premium Funding business (Mar 13) – Increased technology spend – Costs associated with the Enforceable Undertaking

• 1. During the half year ended 30 Sep 13 Group Treasury revised internal funding transfer pricing arrangements relating to BFS‟ deposit and lending activities. Comparatives have been restated to reflect the current methodology. 1H14 operating income

and net profit contribution excludes the gain on sale of OzForex which will be recognised in 2H14. 2. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group‟s statutory P&L and deposit premium paid to BFS by Group Treasury for the generation of deposits. 3. Includes investment and loan impairments. 4. Management accounting profit before unallocated corporate costs, profit share and income tax. 5. Funds under management / advice / administration („FUM / FUA‟) includes AUM, funds on BFS platforms (e.g. Wrap FUA), total loan and deposit portfolios, client CHESS holdings and funds under advice (e.g. Macquarie Private Bank).

SLIDE 31

PAGE 31

Macquarie Securities

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Brokerage and commissions 272 234 216 Net interest and trading income1 125 70 62 Other fee and commission income 43 26 26 Other income (4) 25 4 Net operating income 436 355 308 Brokerage, commission and trading-related expenses (66) (59) (72) Other operating expenses (299) (282) (300) Total operating expenses (365) (341) (372) Net profit/(loss) contribution2 71 14 (64) Staff numbers 1,038 1,020 1,037

• Improved performance from all businesses
• Brokerage and commissions up 26% on 1H13

– Improved equity market conditions particularly in Asia and Australia – Increased market turnover and improved market share

• Net interest and trading income up 102% on 1H13

– Improved equity market trading conditions – 1H13 included the impact of legacy and discontinued businesses

• Other fee and commission income up 65% on 1H13 largely driven by increased

ECM revenues

• Other income of $A25m in the prior period includes profit on the sale of an

investment in an exchange

• Total operating expenses of $A365m down 2% on 1H13

– Reduced costs in legacy businesses, partially offset by impact of weaker AUD

• 1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group's statutory P&L. 2. Management accounting loss before unallocated corporate costs, profit share and

income tax.

SLIDE 32

PAGE 32

Macquarie Capital

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Fee and commission income 321 286 300 Investment and other income 67 166 65 Net interest and trading income / (expense)1 (3) (22) (37) Impairment charges2 (13) (20) (43) Loss on change of ownership interest

• (40)

Internal management revenue3

• 3

7 Net operating income 372 413 252 Total operating expenses (283) (259) (260) Non-controlling interests 12 (14) 18 Net profit contribution4 101 140 10 Staff numbers 1,117 1,105 1,114

• Fee and commission income up 7% on 1H13

– Advisory and capital markets activity for 1H14 including 204 transactions valued at approx. $A26b (1H13: 205 transactions valued at approx. $A35b; 2H13: 242 transactions valued at approx. $A50b) – Increased ECM conditions in Australia and increased DCM activity in the US, partially offset by lower M&A income

• Investment and other income of $A67m in line with 1H13, down on a strong

2H13 due to: – Fewer material asset sales – Seasonal income from consolidated principal investments

• Net interest and trading expense of $A3m well down on 1H13 reflecting growth
• f the principal debt portfolio and lower funding costs as a result of a reduced

equity investment portfolio

• Impairments down substantially
• Total operating expenses of $A283m up 9% on 1H13 which was mainly driven

by weaker AUD

• 1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group‟s statutory P&L. 2. Includes investment and loan impairments. 3. Internal revenue allocations are

eliminated on consolidation in the Group‟s statutory P&L. 4. Management accounting profit before unallocated corporate costs, profit share and income tax.

SLIDE 33

PAGE 33

Fixed Income, Currencies and Commodities

Result

Sep 13 $Am Mar 13 $Am Sep 12 $Am Commodities1 393 366 347 Credit, interest rates and foreign exchange1 223 271 190 Fee and commission income 81 91 80 Equity investment income 33 78 64 Impairment charges2 (112) (104) (124) Other income 30 11 16 Internal management revenue3 5 12 5 Net operating income 653 725 578 Brokerage, commission and trading-related expenses (124) (68) (74) Other operating expenses (326) (313) (285) Total operating expenses (450) (381) (359) Net profit contribution4 203 344 219 Staff numbers 932 946 949

• Commodities income up 13% on 1H13 to $A393m

– Declining gold prices driving increased client activity and trading opportunities – Increased level of physical trading in base metals, resulting in higher trading income (largely offset by increased brokerage and commission expenses) – Agricultural client and trading activity down significantly

• Credit, interest rates and FX income up 17% on 1H13 to $A223m

– Improved volatility and volumes in foreign exchange and interest rate markets – Credit trading income broadly flat (compared with strong 2H13)

• Equity investment income down 48% on 1H13 reflecting weak sentiment in the

resource sector resulting in fewer asset realisations

• Impairment charges of $A112m down 10% on 1H13

– Equity impairments broadly in line with 1H13 reflecting continued weakness in resources sector – Lower credit impairments

• Other income of $A30m up 88% on 1H13 benefitting from the sale of NPIs
• Total operating expenses up 25% on 1H13 to $A450m

– Higher brokerage, commission and trading-related expenses driven by increased storage and freight costs associated with physical commodities trading activities – Impact of weaker AUD

• 1. Includes internal net interest expense and transfer pricing on funding provided by Group Treasury that is eliminated on consolidation in the Group‟s statutory P&L. 2. Includes investment and loan impairments. 3. Internal revenue allocations are

eliminated on consolidation in the Group‟s statutory P&L. 4. Management accounting profit before unallocated corporate costs, profit share and income tax.

SLIDE 34

PAGE 34

• 1. Retail deposits are a subset of total deposits per the funded balance sheet ($A38.0b at 30 Sep 13), which differs from total deposits per the statutory balance sheet ($A42.7b at 30 Sep 13). The funded balance sheet excludes any deposits which do not

represent a funding source for the Group. 2. Excludes funding raised after 30 Sep 13, including $A0.4b term secured finance raised in Oct 13.

• Balance sheet remains solid and conservative

– Term assets covered by term funding, stable deposits and equity – Minimal reliance on short term wholesale funding markets

• Retail deposits1 continuing to grow, up 7% to $A33.1b at Sep 13 from $A31.0b at Mar 13
• $A7.9b of new term funding raised since 31 Mar 132

– $A2.6b mortgage and motor vehicle/equipment warehouse funding – $A1.9b mortgage and motor vehicle/equipment securitisations – $A1.1b MBL senior unsecured debt issuance in US market – $A0.7b MBL senior unsecured debt issuance in Euro market – $A1.0b MBL private placements and structured note issuance – $A0.6b of MCN hybrid

Balance sheet highlights

SLIDE 35

PAGE 35

• 1. Includes $A0.3b of undrawn term facilities for the Group.

Well diversified funding sources

MGL term funding (drawn and undrawn1) maturing beyond one year (including equity and hybrids)

• Well diversified funding sources
• Minimal reliance on short term wholesale funding markets
• Deposit base represents 41% of total funding sources

Diversity of MGL funding sources

• Term funding beyond one year (excluding equity) has a

weighted average term to maturity of 4.6 years

$Ab Wholesale issued paper 9.5% Deposits - corporate and wholesale 5.0% Deposits - retail 35.6% Other loans 1.2% Structured notes 2.2% Secured funding 8.4% Senior credit facility 2.8% Bonds 18.0% Loan capital 3.7% Equity & Hybrids 13.6% 5 10 15 20 25 1-2 yrs <3 yrs <4 yrs <5 yrs 5 yrs+ Debt Loan capital Equity and hybrids

SLIDE 36

PAGE 36

Continued retail deposit growth

• Macquarie has been successful in pursuing its strategy of diversifying its funding sources through

growing its deposit base – In excess of 1 million retail clients, of which more than 681,000 are depositors – Focus on the composition and quality of the deposit base – Continue to grow deposits in the CMA product which has an average balance of $A41k

5 10 15 20 25 30 35 40 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Sept 13

$Ab

Retail Corporate/wholesale

SLIDE 37

PAGE 37

Loan portfolio1 growth – Funded Balance Sheet

1 . For the purposes of this disclosure, loan assets at amortised cost per the statutory balance sheet of $A54.5b at 30 Sep 13 ($A49.1b at 31 Mar 2013) are adjusted to include fundable assets not classified as loans on the statutory balance sheet (for example, assets subject to operating leases) and exclude loan assets that do not represent a funding requirement of the Group. 2. Total loan assets per funded balance sheet includes self securitisation assets.

Category Sep 13 $Ab Mar 13 $Ab Sep 12 $Ab

Mortgages: Australia 8.0 6.8 4.5 United States 0.5 0.7 0.7 Canada 6.1 6.7 7.8 Other 0.2 0.2 0.1 Total mortgages 14.8 14.4 13.1 Structured investments 4.3 3.6 3.4 Banking 4.5 4.0 3.8 Real Estate 2.6 2.3 1.9 Resources and commodities 2.1 2.3 2.4 Finance leases 4.9 4.2 3.5 Corporate lending 5.5 5.6 6.3 Other lending 1.5 1.4 1.1 40.2 37.8 35.5 Operating leases 5.7 5.1 4.6 Total loan assets per funded balance sheet2 45.9 42.9 40.1

SLIDE 38

PAGE 38

• 1. Equity investments per the statutory balance sheet of $A7,233m (Mar 13: $A7,582m) have been adjusted to reflect the total economic exposure to Macquarie. 2. Total funded equity investments of $A6,122m (Mar 13: $A5,468m), less available for sale

reserves of $A689m (Mar 13: $A365m) and associate reserves of $A16m (Mar 13: $Anil), plus other assets of $A85m (Mar 13: $A122m).

Category Carrying value2 Sep 13 $Am Carrying value2 Mar 13 $Am Description

Macquarie Funds (MIRA) managed funds 1,218 1,158 Macquarie Infrastructure Company, Macquarie Atlas Roads, Macquarie Mexican REIT, Macquarie Korea Infrastructure Fund, Asian Pay Television Trust, Macquarie International Infrastructure Fund Other Macquarie managed funds 302 302 Includes investments that hedge DPS plan liabilities Transport, industrial and infrastructure 1,771 1,558 Includes investment in Sydney Airport Telcos, IT, media and entertainment 610 646 Includes investment in Southern Cross Media Group Limited Energy, resources and commodities 573 588 Over 100 separate investments Real estate investment, property and funds management 574 621 Represents property and JV investments/loans. Includes investments in American Manufactured Communities REIT, MGPA, Charter Hall Limited and Medallist Finance, wealth management and exchanges 454 352 Includes investments in fund managers, investment companies, securities exchanges and other corporations in the financial services industry. Significant investments include M.D. Sass and OzForex 5,502 5,225

Equity investments of $A5.5b1

SLIDE 39

PAGE 39

• 1. „Harmonised‟ Basel III figures assume full alignment with BIS in areas where APRA differs from the BIS. 2. The Tier 1 capital ratio of 8.5% includes the capital conservation buffer (CCB) and is not required by APRA until 2016 and by BIS until 2019.
• 3. Based on APRA prudential standards in force since 1 Jan 13.
• Based on the Macquarie Group Basel III capital position as at 30 Sep 13 and on a

Harmonised Basel III basis1: – Group capital surplus is $A4.5b measured at 7% RWA and $A3.5b at 8.5%2 (BIS requirement in 2019) – MBL‟s CET1 ratio is 11.8%, pro forma CET1 ratio of 12.7% including surplus capital held in the Non-Bank Group

• Under Basel III, local regulators have the discretion to make adjustments to the timing, nature and quantum
• f Basel III reforms (so called “super equivalence”). After adjusting for APRA‟s “super equivalence”3 and on

a fully implemented basis (not otherwise required by APRA until 2016): – Group capital surplus is $A3.1b measured at 7% RWA and $A2.1b at 8.5%2 – MBL‟s CET1 ratio is 9.8%, pro forma CET1 ratio of 10.8% including surplus capital held in the Non-Bank Group

Group Capital Surplus and Bank Group‟s CET1 ratio in excess of minimum

SLIDE 40

PAGE 40 11.6% 11.8% 9.8%

11.6% 11.8% 9.8% 13.0% 12.7% 10.8% 0.3% (0.1%) (2.0%) 0% 2% 4% 6% 8% 10% 12% 14% Harmonised Basel III at Mar 13 Net capital generation Other Harmonised Basel III at Sep 13 APRA Basel III 'super equivalence' APRA Basel III at Sep 13

Bank Group Common Equity Tier 1 (CET1) Ratio: Basel III (Sep 13)

CCB (2.5%) Basel III minimum CET1 (4.5%)

1 2 3 4

Surplus capital held in the Non-Bank group

• 1. Harmonised‟ Basel III figures assume alignment with BIS in areas where APRA differs from the BIS. 2. Includes MBL 1H14 P&L less dividends paid from MBL to MGL. 3. Includes the net impact of hedging employed to reduce the sensitivity of MBL‟s

capital position to FX translation movements. 4. APRA Basel III „super-equivalence‟ includes full CET1 deductions of equity investments (0.9%); deconsolidated subsidiaries (0.6%); DTAs and other impacts (0.5%).

• Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.8%; Tier 1: 10.9%
• Basel III applies only to the Bank Group and not the Non-Bank Group

Bank Group Basel III Common Equity Tier 1 (CET1) Ratio

SLIDE 41

PAGE 41

• 1. Peer leverage ratios from Sep 13 quarter financial result public disclosures (or most recent public disclosures if unavailable). MBL ratio as at Jun 13. EU banks disclosed under CRD IV fully-loaded leverage ratio, which is based on the Dec 10 Basel

Committee on Banking Supervision (BCBS) proposals. US banks disclosed under US Basel III final rules, where leverage ratio is also based on the Dec 10 BCBS proposals. MBL leverage ratio calculated on an estimated basis, using the Jun 13 BCBS revised leverage ratio requirements. 2. In Jul 13, the US banking agencies proposed higher leverage ratio requirements for the eight US bank holding companies that have been identified as G-SIBs. 3. BAML disclosures indicated a leverage ratio '>5%', which is represented as 5.0%. 4. Where significant capital actions have been completed post disclosure dates, pro forma leverage ratios are presented as per the peers‟ public disclosures: Société Générale 2Q13 leverage ratio includes the disposal of legacy assets and a subordinated hybrid Tier 1 issue completed during July and August 2013; UBS 3Q13 leverage ratio includes the impact of exercising the CHF 2.5b SNB StabFund option to be completed in 4Q13; Barclays 3Q13 leverage ratio includes the £5.8b rights issue completed Oct 13; Credit Suisse 3Q13 leverage ratio includes the exchange on 23 Oct 13 of CHF 3.8b hybrid Tier 1 notes into high-trigger capital instruments. 5. UBS leverage ratio disclosed under the Swiss Systemically Relevant Bank (SRB) Basel III rules (fully applied). 6. Credit Suisse leverage ratio disclosed on a Basel III Tier 1 basis.

Basel III Leverage Ratio peer comparison

2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% MBL Citi BAML JP Morgan Morgan Stanley Standard Chartered HSBC BNP RBS SocGen UBS Deutsche Bank Barclays Credit Suisse

Basel III Tier 1 Leverage Ratio1

Supplemental Leverage Ratio required for US Covered Bank Holding Companies 2 Minimum Basel III Leverage Ratio US Banks

3 4 4,6 4,5 4

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04

Outlook

Nicholas Moore

Managing Director and Chief Executive Officer

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Short term outlook

• Summarised below are the outlook statements for each Operating Group
• FY14 results will vary with market conditions, particularly the capital markets facing businesses which continue to experience

subdued market conditions

• 1. CLSA Investors‟ forum held on 24 Sep 13. 2. Range excludes FY09 provisions for loan losses of $A135m related to Real Estate Structured Finance loans as this is a restructured business. 3. Range excludes FY09 loss on sale of Italian mortgages of

$A248m as this is a discontinued business. 4. During the half year ended 30 Sep 13, Group Treasury revised internal funding transfer pricing arrangements relating to BFS‟s deposit and lending activities. Comparatives have been restated to reflect the current methodology.

Net profit contribution Operating Group FY07- FY13 historical range FY07-FY13 average FY13 FY14 outlook as announced in Sep 131 Update to FY14 outlook Macquarie Funds $A0.3b – $A1.1b $A0.7b $A0.8b Up on FY13 due to base and performance fees and impact of FX No change Corporate and Asset Finance $A0.1b – $A0.7b2 $A0.4b $A0.7b Broadly in line with FY13 Up on FY13 Banking and Financial Services $A0.1b – $A0.3b3,4 $A0.2b4 $A0.2b4 Broadly in line with FY13 No change Macquarie Securities $A(0.2)b – $A1.2b $A0.4b $A(50)m Up on FY13 No change Macquarie Capital $A(0.1)b – $A1.6b $A0.5b $A0.2b Up on FY13 No change FICC $A0.5b – $A0.8b $A0.6b $A0.6b Broadly in line with FY13 given likely impairments in MEC Down on FY13 Corporate – Compensation ratio to be consistent with historical levels – Continued higher cost of funding due to our conservative approach to liquidity management – Based on present mix of income, currently expect tax rate to be broadly in line with FY13

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• Consistent with our previous statements to the market, while market volatility makes forecasting difficult, we continue to

expect the FY14 net profit contribution1 from operating groups to be up on FY13

• Tax rate is currently expected to be broadly in line with FY13
• Accordingly, we continue to expect an improved result for FY14 on FY13 provided market conditions for FY14 are not

worse than FY13 – In line with previous years, it is currently expected that the second half result will be stronger than the first half

• This short term outlook excludes the impact of the proposed distribution of Sydney Airport securities to

Macquarie shareholders

• The FY14 result also remains subject to a range of other challenges including:

– the cost of our continued conservative approach to funding and capital; and – regulation, including the potential for regulatory changes

Short term outlook

• 1. All references to net profit contribution from operating groups are pre profit share, income tax and unallocated corporate costs.

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• Macquarie remains well positioned to deliver superior performance in the medium term
• Deep expertise in major markets
• Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions

– Annuity-style income is provided by three significant businesses which are delivering superior returns following years of investment and recent acquisitions – Macquarie Funds, Corporate and Asset Finance and Banking and Financial Services – Three capital markets facing businesses well positioned to benefit from improvements in market condition with strong platforms and franchise positions – Macquarie Securities, Macquarie Capital and Fixed Income, Currencies and Commodities

• Ongoing benefits of continued cost initiatives
• Strong and conservative balance sheet

– Well matched funding profile with minimal reliance on short term wholesale funding – Surplus funding and capital available to support growth

• Proven risk management framework and culture

Medium term

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Operating Group APRA Basel III Capital @ 8.5% ($Ab)

• Approx. 1H14 Return
• n Ordinary Equity1

Annuity-style businesses 5.5

• Approx. 7-Year Average

Return on Ordinary Equity1 Macquarie Funds Group 2.0 19%2 20%3 Corporate and Asset Finance 2.4 Banking and Financial Services 1.1 Capital markets facing businesses 4.4

• Approx. 7-Year Average

Return on Ordinary Equity1 Macquarie Securities 0.6 6% 15%-20% Macquarie Capital 1.3 FICC 2.5 Corporate and Other 1.7 Legacy Assets 0.9 Corporate 0.8 Total regulatory capital requirement @ 8.5% 11.6 Comprising: Ordinary Equity Hybrid 9.9 1.7 Add: Surplus Ordinary Equity 2.1 Total APRA Basel III capital supply 13.7

Approximate business Basel III Capital & ROE

• 1. NPAT used in the calculation of approx. annualised ROE is based on Operating Group‟s net profit contribution

adjusted for indicative allocations of profit share, tax and other corporate expenses. Accounting equity is attributed to businesses based on regulatory capital requirements. 7-year average covers FY07 to FY13, inclusively.

• 2. During the half year ended 30 Sep 13, Group Treasury revised internal funding transfer pricing arrangements

relating to Banking and Financial Services‟ deposit and lending activities.

• 3. CAF excluded from 7-year average as not meaningful given the significant increase in scale of CAF‟s platform
• ver the 7-year period.

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MFG

• Annuity-style business that is diversified across regions, products, asset classes and investor types
• Well positioned for organic growth with several strongly performing products and an efficient operating platform
• Any improvement in market confidence should lead to increased income from higher margin products

CAF

• Pursuing growth in the loan and lease portfolio
• Continue to seek opportunities for further asset realisations
• Funding from asset securitisation throughout the cycle

BFS

• Ongoing expansion of intermediary portfolios including Wrap and Australian Mortgages
• Increased savings through compulsory superannuation supports both direct and indirect business
• Any improvement in investor confidence should lead to higher activity in higher return assets such as equities

MSG

• Highly leveraged to any improvement in market conditions and return of investor confidence
• MSG well positioned for recovery in Asian retail derivatives, cash equities and ECM
• Monetise existing strong research platform

MacCap



MacCap can expect to benefit from any improvement in M&A and ECM market activity



MacCap continues to align the business footprint to current opportunities and market conditions in each region

FICC

• Opportunities to grow commodities business, both organically and through acquisition
• Development of institutional coverage for specialised credit, rates and foreign exchange products
• Increase in asset realisations as metals and resource equity market prices improve
• Growing the client base across all regions

Medium term

SLIDE 48

A

Additional information Funding

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Macquarie Group Limited (MGL) Equity Debt and Hybrid Equity Debt and Equity Debt and Equity Debt and Hybrid Equity Non-Bank Group Macquarie Bank Limited (MBL) Bank Group

• MGL and MBL are the Group‟s two primary external funding vehicles which have separate and distinct

funding, capital and liquidity management arrangements

• MBL provides funding to the Bank Group
• MGL provides funding predominantly to the Non-Bank Group

Group funding structure

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Funded balance sheet reconciliation

• The Group‟s statement of financial position is prepared based on generally accepted accounting principles which do not

represent actual funding requirements

• A funded balance sheet reconciliation has been prepared to reconcile the reported assets of the consolidated Group to the

assets that require funding

Sep 13 $Ab Mar 131 $Ab Sep 121 $Ab Total assets per Statement of Financial Position 154.6 144.7 152.2 Deductions: Self funded trading assets (16.7) (13.6) (13.9) Derivative revaluation accounting gross ups (13.9) (14.4) (20.4) Life investment contracts and other segregated assets (5.2) (5.4) (5.0) Outstanding trade settlement balances (7.0) (7.7) (7.4) Short-term working capital assets (5.3) (5.2) (4.9) Less non-recourse funded assets: Securitised assets and non-recourse warehouses (12.7) (10.8) (12.2) Total assets per Funded Balance Sheet 93.8 87.6 88.4

• 1. Prior period comparatives have been restated for the effect of applying AASB 10. Refer to Note 1 (ii) in the interim financial statements for the half year ended 30 Sep 13.

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• 1. Prior period comparative have been restated for the effect of applying AASB 10. Refer to Note 1 (ii) in the interim financial statements for the half year ended 30 Sep 13. 2.This includes Macquarie Group Capital Notes of $A0.6b, Preferred membership

Interests of $A0.4b and Exchangeable Capital Securities of $A0.2b. 3. Include ordinary capital, Macquarie Income Securities of $A0.4b and Macquarie Income Preferred Securities of $A0.1b. 4. Includes $A0.3b of undrawn term facilities for the Group.

Funding for the Group

30 September 2013

Sep 13 $Ab Mar 131 $Ab Sep 121 $Ab Funding sources Negotiable certificates of deposits 2.2 1.4 1.3 Commercial paper 6.7 3.5 4.4 Structured notes 2.1 2.4 2.2 Secured funding 8.0 9.4 10.0 Bonds 16.9 16.5 16.2 Other loans 1.2 0.7 0.4 Senior credit facility 2.6 2.4 3.2 Retail deposits 33.1 31.0 30.8 Corporate and wholesale deposits 4.9 5.2 5.4 Loan capital2 3.4 3.2 3.0 Equity and hybrids3 12.7 11.9 11.5 Total funding sources 93.8 87.6 88.4 Funded assets Cash and liquid assets 21.5 19.8 22.6 Self Securitisation 6.2 6.2 4.5 Net trading assets 15.1 15.1 16.1 Loan assets < 1 year 12.0 9.9 9.2 Loan assets > 1 year 27.7 26.8 26.5 Debt investment securities 2.9 2.3 2.0 Co-investment in Macquarie-managed funds and other equity investments 6.1 5.5 5.1 Property, plant & equipment and intangibles 1.8 1.7 1.9 Net trade debtors 0.5 0.3 0.5 Total funded assets 93.8 87.6 88.4

• Well diversified funding sources
• Minimal reliance on short term wholesale funding markets
• Deposit base represents 41% of total funding sources
• Term funding beyond one year (excluding equity) has a

weighted average term to maturity of 4.6 years

MGL term funding (drawn and undrawn4) maturing beyond

• ne year (including equity and hybrids)

$Ab 5 10 15 20 25 1-2 yrs <3 yrs <4 yrs <5 yrs 5 yrs+ Debt Loan capital Equity and hybrids

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• 1. Prior period comparative have been restated for the effect of applying AASB 10. Refer to Note 1 (ii) in the interim financial statements for the half year ended 30 Sep 13. 2. This includes Exchangeable Capital Securities of $A0.2b. 3. Include ordinary

capital, Macquarie Income Securities of $A0.4b and Macquarie Income Preferred Securities of $A0.1b. 4. Includes $A0.3b of undrawn term facilities for the Bank Group.

Funding for the Bank Group

30 September 2013

Sep 13 $Ab Mar 131 $Ab Sep 121 $Ab Funding sources Negotiable certificates of deposits 2.2 1.4 1.3 Commercial paper 6.7 3.5 4.4 Structured notes 1.4 1.4 1.4 Secured funding 7.7 9.3 9.9 Bonds 10.5 10.7 11.8 Other loans 0.9 0.5 0.2 Retail deposits 33.1 31.0 30.8 Corporate and wholesale deposits 4.9 5.2 5.4 Loan capital2 2.4 2.2 2.0 Equity and hybrids3 9.4 8.7 8.7 Total funding sources 79.2 73.9 75.9 Funded assets Cash and liquid assets 19.4 18.0 20.8 Self securitisation 6.2 6.2 4.5 Net trading assets 13.9 14.5 15.0 Loan assets < 1 year 11.6 9.6 8.9 Loan assets > 1 year 26.7 25.7 25.5 Debt investment securities 2.8 2.1 1.8 Non-Bank Group deposit with MBL (3.6) (4.2) (2.5) Co-investment in Macquarie-managed funds and other equity investments 1.1 1.1 1.2 Property, plant & equipment and intangibles 1.2 1.0 1.1 Net trade debtors (0.1) (0.1) (0.4) Total funded assets 79.2 73.9 75.9

• Bank balance sheet remains liquid, well capitalised and

with a diversity of funding sources

• Term funding beyond one year (excluding equity) has a

weighted average term to maturity of 3.8 years

• Accessed term funding in markets including United

States, Europe, Australia and Korea

MBL term funding (drawn and undrawn4) maturing beyond

• ne year (including equity and hybrids)

$Ab 2 4 6 8 10 12 14 1-2yrs <3yrs <4yrs <5yrs 5yrs + Debt Loan capital Equity and hybrids

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• 1. Prior period comparative have been restated for the effect of applying AASB 10. Refer to Note 1 (ii) in the interim financial statements for the half year ended 30 Sep 13. 2. This includes Macquarie Group Capital Notes of $A0.6b and Preferred

Membership Interests of $A0.4b. 3. There are no undrawn term facilities in the Non-Bank Group.

Funding for the Non-Bank Group

30 September 2013

Sep 13 $Ab Mar 131 $Ab Sep 121 $Ab Funding sources Structured notes 0.7 1.0 0.8 Secured funding 0.3 0.1 0.1 Bonds 6.4 5.8 4.4 Other loans 0.3 0.2 0.2 Senior credit facility 2.6 2.4 3.2 Loan capital2 1.0 1.0 1.0 Equity 3.3 3.2 2.8 Total funding sources 14.6 13.7 12.5 Funded assets Cash and liquid assets 2.1 1.8 1.8 Non-Bank Group deposit with MBL 3.6 4.2 2.5 Net trading assets 1.2 0.6 1.1 Loan assets < 1 year 0.4 0.3 0.3 Loan assets > 1 year 1.0 1.1 1.0 Debt investment securities 0.1 0.2 0.2 Co-investment in Macquarie-managed funds and other equity investments 5.0 4.4 3.9 Property, plant & equipment and intangibles 0.6 0.7 0.8 Net trade debtors 0.6 0.4 0.9 Total funded assets 14.6 13.7 12.5

• Non-Bank Group is predominantly term funded
• Term funding beyond one year (excluding equity) has a

weighted average term to maturity of 6.0 years

Non-Bank Group term funding (drawn and undrawn3) maturing beyond one year (including equity)

$Ab 2 4 6 8 1-2 yrs <3 yrs <4 yrs <5 yrs 5 yrs+ Debt (drawn and undrawn) Loan capital Equity

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• Self funded trading assets: Macquarie enters into stock borrowing and lending as well as repurchase agreements and reverse

repurchase agreements in the normal course of trading activity that it conducts with its clients and counterparties. Also as part of its trading activities, Macquarie pays and receives margin collateral on its outstanding derivative positions. These trading related asset and liability positions are presented gross on the balance sheet but are viewed as being self funded to the extent that they offset one another and, therefore, are netted as part of this adjustment

• Derivative revaluation accounting gross ups: Macquarie‟s derivative activities are mostly client driven with client positions hedged by
• ff-setting positions. The derivatives are largely matched and this adjustment reflects that the matched positions do not require funding
• Life investment contracts and other segregated assets: These represent the assets and liabilities that are recognised where

Macquarie provides products such as investment-linked policy contracts. The policy (contract) liability will be matched by assets held to the same amount and hence do not require funding

• Outstanding trade settlement balances: At any particular time Macquarie‟s broking business will have outstanding trades to settle

with other brokers. These amounts (payables) can be offset in terms of funding by amounts that Macquarie is owed by brokers on other trades (receivables)

• Short-term working capital assets: As with the outstanding trade settlement balances above, Macquarie through its day-to-day
• perations generates working capital assets (e.g. receivables and prepayments) and working capital liabilities (e.g. creditors and

accruals) that produce a „net balance‟ that requires or provides funding

• Securitised assets and non-recourse warehouses: These represent assets that are funded by third parties with no recourse to

Macquarie including lending assets (mortgages and leasing) sold down into external securitisation entities or transferred to external funding warehouses

Explanation of Funded Balance Sheet reconciling items

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Liquidity Policy

• The key requirement of MGL and MBL‟s liquidity policies is that the entities are able to meet all liquidity obligations on a daily

basis and during a period of liquidity stress: – a minimum twelve month period with constrained or no access to funding markets and with only a limited impact on franchise businesses

• Term assets are funded by term funding, stable deposits and equity

Liquidity Framework

• A robust liquidity risk management framework ensures that both MGL and MBL are able to meet their funding requirements

as they fall due under a range of market conditions. Key tools include: – Scenario analysis – Unencumbered liquid asset holdings – Liability driven approach to balance sheet management

• Liquidity management is performed centrally by Group Treasury, with oversight from the Asset and Liability Committee and

the Risk Management Group

• The Boards of each entity approve their respective liquidity policy and are provided with liquidity reporting on a monthly basis

Conservative long standing liquidity risk management framework

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B

Additional information Capital

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30 September 2013 Harmonised Basel III $Am APRA Basel III $Am Macquarie Group eligible capital: Bank Group Gross Tier 1 capital 9,629 9,629 Non-Bank Group eligible capital 4,061 4,061 Eligible capital 13,690 13,690 (a) Macquarie Group capital requirement: Bank Group capital requirement Risk Weighted Assets (RWA) 66,897 62,844 Capital required to cover RWA1 4,683 4,399 Tier 1 deductions 1,058 2,806 Total Bank Group capital requirement 5,741 7,205 Total Non-Bank Group capital requirement 3,428 3,428 Total Macquarie Group capital requirement (at 7% of the Bank Group RWA) 9,169 10,633 (b) Macquarie Group regulatory capital surplus (at 7% of the Bank Group RWA) 4,521 3,057 (a)-(b) Additional capital requirement required to maintain 8.5% Tier 1 ratio in Bank Group 1,003 943 (c) Macquarie Group regulatory capital surplus (at 8.5%2 of the Bank Group RWA) 3,518 2,114 (a)-(b)-(c)

Macquarie Group Basel III regulatory capital

Surplus calculation

• 1. Calculated at the internal minimum Tier 1 ratio of the Bank Group, which is 7%. 2. Calculated at 8.5% of the Bank Group‟s RWAs. The 8.5% represents the Basel III minimum Tier 1 ratio of 6% plus 2.5% of capital conservation buffer (CCB). The 2.5%

CCB is not required by APRA until 2016 and by BIS until 2019.

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30 September 2013 Risk Weighted Assets $Am Tier 1 Deductions $Am Capital Requirement1 $Am Credit risk On balance sheet 36,632 2,564 Off balance sheet 11,308 792 Credit risk total 47,940 3,356 Market risk 4,818 337 Operational risk 8,443 591 Other2 1,643 2,806 2,921 Contribution to Group capital calculation 62,844 2,806 7,205

• 1. The capital requirement is calculated as the capital required for RWA, at the internal minimum Tier 1 ratio of the Bank Group (7%), plus Tier 1 deductions. 2. Risk weighted assets include 6% IRB uplift. Tier 1 deduction includes deduction for equity

exposure required under APRA Basel III rules.

Macquarie Group APRA Basel III regulatory capital – Bank Group contribution

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Risk1 Basel III ECAM Credit Capital requirement generally determined by Basel III IRB formula, with some parameters specified by the regulator (e.g. loss given default) Capital requirement generally determined by Basel III IRB formula, but with internal estimates of some parameters Equity Harmonised Basel III: 250%, 300% or 400% risk weight, depending on the type of

• investment2. Deduction from Common Equity Tier 1 above a threshold

APRA Basel III: 100% Common Equity Tier 1 deduction Extension of Basel III credit model to cover equity exposures. Capital requirement between 36% and 79% of face value; average 51% Market 3 times 10 day 99% Value at Risk (VaR) plus 3 times 10-day 99% Stressed VaR plus a specific risk charge Scenario-based approach Operational Advanced Measurement Approach Advanced Measurement Approach

• 1. The ECAM also covers insurance underwriting risk, non-traded interest rate risk and the risk on assets held as part of business operations, e.g. fixed assets, goodwill, intangible assets, capitalised expenses and certain minority stakes in associated

companies or stakes in joint ventures. 2. Includes all Bank Book equity investments, plus net long Trading Book holdings in financial institutions.

Macquarie Group regulatory capital

Non-Bank Group contribution

• APRA has specified a regulatory capital framework for MGL
• A dollar capital surplus is produced; no capital ratio calculation is specified
• APRA has approved Macquarie‟s Economic Capital Adequacy Model (ECAM) for use in calculating the regulatory capital requirement of

the Non-Bank Group

• Any significant changes to the ECAM must be approved by the MGL Board and notified to APRA within 14 days
• The ECAM is based on similar principles and models as the Basel III regulatory capital framework for Banks, with both calculating

capital at a one year 99.9% confidence level:

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30 September 2013 Assets $Ab Capital Requirement $Am Equivalent Risk Weight Funded assets Cash and liquid assets 2.0 21 13% Loan assets1 1.3 192 185% Debt investment securities 0.1 11 139% Co-investment in Macquarie-managed funds and equity investments 4.8 2,293 596% Co-investment in Macquarie-managed funds and equity investments (relating to investments that hedge DPS plan liabilities) 0.2 Property, plant & equipment and intangibles2 0.6 293 609% Non-Bank Group deposit with MBL 3.6 Net trading assets 1.2 Net trade debtors 0.6 Total Funded Assets 14.4 2,810 Self-funded and non-recourse assets Self-funded trading assets 2.1 Broker settlement balances 3.6 Derivative revaluation accounting gross-ups 0.2 Working capital assets 2.3 Total self-funded and non-recourse assets 8.2 TOTAL NON-BANK GROUP ASSETS 22.6 Off balance sheet exposures, operational, market and other risk, and diversification offset3 618 NON-BANK GROUP CAPITAL REQUIREMENT 3,428

• 1. Includes leases. 2. A component of the intangibles relating to the acquisitions of Orion Financial Inc and Tristone Capital Global Inc are supported 100% by exchangeable shares. These exchangeable shares have not been included in eligible

regulatory capital. 3. Capital associated with net trading assets (e.g. market risk capital) and net trade debtors has been included here.

Macquarie Group regulatory capital

Non-Bank Group contribution

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C

Glossary

SLIDE 62

PAGE 62

Glossary

$A Australian Dollar $C Canadian Dollar $US United States Dollar € Euro 1H First half 2H Second half 1H13 Half Year ended 30 September 2012 1H14 Half Year ended 30 September 2013 2H13 Half Year ended 31 March 2013 ABN Australian Business Number ADI Authorised Deposit -Taking Institution Approx. Approximately APRA Australian Prudential Regulatory Authority ANZ Australia and New Zealand ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange AUD Australian Dollar AUM Assets Under Management AVS Available for Sale BIS Bank for International Settlements BFS Banking and Financial Services CAF Corporate and Asset Finance CCB Capital Conservation Buffer CET1 Common Equity Tier 1 CHESS Australian Clearing House and Electronic Sub-Register System CMA Cash Management Account CVA Credit Valuation Adjustment DEFT Direct Electronic Funds Transfer DCM Debt Capital Markets DPS Dividend Per Share DRP Dividend Reinvestment Plan ECAM Economic Capital Adequacy Model ECM Equity Capital Markets EMEA Europe, the Middle East and Africa

SLIDE 63

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Glossary

EPS Earnings Per Share EUM Equity Under Management FICC Fixed Income, Currencies and Commodities FIG Financial Institutions Group FUA Funds Under Administration FUM Funds Under Management FX Foreign Exchange FY07 Full Year ended 31 March 2007 FY09 Full Year ended 31 March 2009 FY13 Full Year ended 31 March 2013 FY14 Full Year ended 31 March 2014 GATT General Agreements on Tariffs and Trade GDR Global Depository Receipt IPO Initial Public Offering IRB Internal Ratings-Based JV Joint Venture KRW Korean Wong LNG Liquefied Natural Gas M&A Mergers and Acquisitions MacCap Macquarie Capital MBL Macquarie Bank Limited MEAP Macquarie Essential Assets Partnership MEC Metals and Energy Capital MEIF Macquarie European Infrastructure Fund MEREP Macquarie Group Employee Retained Equity Plan MFG Macquarie Funds Group MGL Macquarie Group Limited MGPA Macquarie Global Property Advisers MIM Macquarie Investment Management MIRA Macquarie Infrastructure and Real Assets MPW Macquarie Private Wealth MSG Macquarie Securities Group Net profit contribution Net Operating Income less Operating Expenses and Non-controlling Interests

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Glossary

NGL Natural Gas Liquids No. Number NOIP Net Over Intrinsic Premium NPAT Net Profit After Tax NZ New Zealand OECD Organisation for Economic Co-operation and Development Operating Income Revenues less those expenses directly attributable to the revenues P&L Profit and Loss PCM Private Capital Markets PPE Property, Plant and Equipment PPP Public Private Partnership REB Real Estate Banking REIT Real Estate Investment Trust RESF Real Estate Structured Finance ROE Return on Equity RWA Risk Weighted Assets SGX Singapore Exchange SMSF Self Managed Super Fund ST Short Term TMET Telecommunications, Media, Entertainment and Technology UK United Kingdom VaR Value at Risk WTO World Trade Organisation

SLIDE 65

Presentation to investors and analysts

Result announcement for the half year ended 30 September 2013

1 November 2013