Macquarie Bank Limited Investor Presentation JPMorgan - - PowerPoint PPT Presentation

SLIDE 1

September 2007

Macquarie Bank Limited

Investor Presentation – JPMorgan conferences, New York and Edinburgh

Richard Sheppard Deputy Managing Director

SLIDE 2

2

Disclaimer

The name "Macquarie" refers to the Macquarie Group, which comprises Macquarie Bank Limited and its worldwide subsidiaries, affiliates, and the funds or companies that they manage. Future results are impossible to predict. Opinions and estimates offered in this presentation constitute our judgement and are subject to change without notice, as are statements about market trends, which are based on current market conditions. This presentation may include forward-looking statements that represent opinions, estimates and forecasts, which may not be

• realized. We believe the information provided herein is reliable, as of the date hereof, but do not warrant its accuracy or
• completeness. In preparing these materials, we have relied upon and assumed, without independent verification, the accuracy

and completeness of all information available from public sources. Macquarie Bank Limited is not licensed to conduct banking business in the United States. It maintains Representative Offices in New York, Texas, California and Washington. With respect to matters pertaining to US securities laws, and to the extent required by such laws, Macquarie Bank Limited and its worldwide subsidiaries consult with, and act through, Macquarie Securities (USA) Inc., a registered broker-dealer and member of FINRA, or another US broker-dealer. Macquarie Bank Limited, London Branch, is authorised to conduct banking business in the United Kingdom. Macquarie Bank Limited, London Branch, Macquarie Europe Limited and Macquarie Investment Management (UK) Limited are authorised and regulated by the United Kingdom Financial Services Authority. Any Macquarie subsidiary noted in this presentation is not an authorized deposit-taking institution for the purposes of Banking Act (Commonwealth of Australia) 1959, and such subsidiaries obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of any such subsidiary. Past performance is not an indicator of future performance.

Throughout this report, periods prior to the 2005 financial year are reported under previous AGAAP, unless otherwise stated.

SLIDE 3

3

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 4

4

A diversified financial services institution

Full service in Australia Broad investment banking in Asia-Pacific Focussed participation in international markets Established 1969, banking license 1985, listed 1996 Market capitalisation: $A20.4b* – Top 15 company on ASX, over 100,000 shareholders

(*as at 9c h 06 – Macquarie Securities)

* At 19 Sept 2007

SLIDE 5

5

Over 11,000 staff in 24 countries

25% increase since August 2006

NORTH AMERICA

1,225 staff

SOUTH AMERICA

23 staff

NEW ZEALAND

112 staff

AUSTRALIA

6,747 staff

AFRICA

42 staff

ASIA

1,806 staff

EUROPE & MIDDLE EAST

1,105 staff

Dublin Paris Milan Vienna Rome Amsterdam London Dubai Zurich Munich Frankfurt Geneva Abu Dhabi Mumbai Cape Town Johannesburg Auckland Wellington Christchurch Jakarta Bangkok Labuan Singapore Kuala Lumpur Seoul Tokyo Manila Hong Kong Taipei Hsinchu Shanghai Beijing Tianjin Sao Paulo Chicago Toronto Montreal Jacksonville Savannah Miami San Jose San Francisco Seattle Vancouver New York Boston Carlsbad Los Angeles Irvine San Diego Houston Denver Sunshine Coast Brisbane Broadbeach Sydney Newcastle Canberra Melbourne Adelaide Perth Calgary Winnipeg New Delhi Troy Atlanta

As at 31 Aug 2007

Manchester

SLIDE 6

6

Operating income is diversified

Financial year ended 31 March 2007

Asset & wealth management: 27%* Investment banking: 42%*

Income up 75% on prior year Income up 39% on prior year

Financial markets: 21%*

Income up 34% on prior year

Lending: 10%*

Income up 23% on prior year

Commodities FX, futures, treasury and debt markets Mergers and acquisitions, advisory, underwriting and principal transactions Financial products Equipment and other leasing Other lending Investment banking, real estate and other specialist funds Equity derivatives Institutional cash equities Banking and securitised lending Retail and wholesale funds management and private client broking Real estate lending

* Represents contribution to total income

SLIDE 7

7

Net Profit After Tax $Am

Years ended 31 March. Data current to 31 March 2007. From 2005 numbers have been reported under International Financial Reporting Standards

100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 69 75 81 87 93 99 '05

March 2007

39 year history of profit

1 2 3 69 71 73 75 77 79

SLIDE 8

8

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 9

9

Years ended 31 March

100 200 300 400 500 600 700 2002 2003 2004 2005 2006 2007

cps

Basic EPS of $A5.92

48% increase on pcp

Profit of $A1.46b

60% increase on pcp $Am

200 400 600 800 1000 1200 1400 1600 2002 2003 2004 2005 2006 2007

Financial Performance

Financial year ended 31 March 2007

50 100 150 200 250 300 350 2002 2003 2004 2005 2006 2007 Special dividend

Dividend of $A3.15

47% increase on pcp Acps

1000 2000 3000 4000 5000 6000 7000 8000 2002 2003 2004 2005 2006 2007

Income of $A7.2b

49% increase on pcp $Am

SLIDE 10

10

70% increase in international income

55% of total income

41% increase* in assets under management

$Am

$225b at August 2007- up 14% since 31 Mar 07

50 100 150 200 2002 2003 2004 2005 2006 2007 Aug-07

* % increase for year ended 31 March 2007 Years ended 31 March

Securities Wholesale Securities Retail Other Specialist Real Estate Infrastructure

INTERNATIONAL INCOME

500 1000 1500 2000 2500 3000 3500 4000 2002 2003 2004 2005 2006 2007

ASSETS UNDER MANAGEMENT Financial year ended 31 March 2007

in FY2007

$Ab

SLIDE 11

11

Expense/income ratio slightly down

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2002 2003 2004 2005 2006 2007

$Am

68% 70% 72% 74% 76% 78% 80% 82%

Expense to Income Ratio (%)

Income Expenses Expense to income ratio

Information on this chart has been restated for all periods to bring it into line with the presentation of fee and commissions expenses as operating expenses.

Expense/income ratio slightly down at 73.2% Financial year ended 31 March 2007

SLIDE 12

12

5 10 15 20 25 30 35 40 2002 2003 2004 2005 2006 2007 $Ab

$A28.8b $A19.8b $A13.4b $A10.0b $A10.6b $A39.4b

Risk weighted assets growth

3.7 times the level of 5 years ago

SLIDE 13

13

Ordinary share capital net of treasury shares, plus retained earnings and reserves attributable to ordinary shareholders. 2002 and 2003 adjusted for dividend provision

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2002 2003 2004 2005 Mar 06 + capital raising Mar 07 + capital raising $Ab

$700m capital raising (May 2006)

Growing capital to support business growth

Strong growth in ordinary shareholders’ equity

AQKUÄ AQKUÄ APKOÄ APKOÄ AOKQÄ AOKQÄ ANKUÄ ANKUÄ ANKSÄ ANKSÄ

$750m capital raising & $80m share purchase plan (May 2007)

ATKNÄ ATKNÄ

SLIDE 14

14

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 15

15

From an Australian institution growing internationally to a global institution headquartered in Australia

1,000 2,000 3,000 4,000 5,000 6,000 7,000 2002 2003 2004 2005 2006 2007

International Australia

* Excluding earnings on capital and after costs directly attributable to earning the income, including fee and commissions expenses.

$Am

70% increase in international income on prior corresponding period from $A2b to $A3.5b despite much stronger $A International income 55% of total income*, up from 48% in prior year

SLIDE 16

16

From an Australian institution growing internationally to a global institution headquartered in Australia

4,000 8,000 12,000 16,000 20,000 24,000 2004 2005 2006 2007 Apr - Aug 07

International Australia

$Am

$A3.5b $A13.7b $A11.7b

International specialist fund equity raisings are more than triple Australian raisings

$A21.6b $A12.4b (5 months)

Years to 31 March

SLIDE 17

17

Managing important assets across the globe

South Africa

N3 Toll N4 Maputo Toll Bakwena Platinum Corridor

United Arab Emirates

Al Ain Industrial City Industrial City of Abu Dhabi

(Phase 2)

Industrial City of Abu Dhabi

Extension Phase 2

ICAD Effluent Treatment Plant

USA

South Bay Expressway Dulles Greenway Indiana Toll Road Skyway FastTrack parking Atlantic Aviation AIR-serv Icon Parking Hanjin Container Terminals District Energy Duquesne Light* The Gas Company (Hawaii) Aquarion* International-Matex Tank

Terminals

Longview Smarte Carte American Consolidated Media Macquarie DDR Macquarie ProLogis^ Macquarie CountryWide Macquarie Office Macquarie Leisure

Canada

Edmonton Ring Road 407 ETR A-25* AltaLink Cardinal Power Sea to Sky Clean Power Operating

Trust***

Halterm Limited Leisureworld Fraser Surrey Docks New World Gaming*

Mexico

Macquarie ProLogis^

UK

M6 Toll Bristol Airport Energy Power Resources (UK) Wales & West Utilities Thames Water CLP Envirogas Arqiva Airwave Red Bee Media Moto-Motorway Services

Provider

National Car Parks East London Bus Group Steam Packet Wightlink Talarius Macquarie Global

Property Advisors (MGPA) New Zealand

Metlife Care Private Lifecare Retirement Care New

Zealand

Macquarie CountryWide Macquarie Leisure

Belgium

Brussels Airport

Denmark

Copenhagen Airport

South Korea

Baekyang Tunnel Cheonan Nonsan Expressway Incheon Expressway Kwangju 2nd Beltway Section 1 & 3 Machang Bridge New Daegu-Busan Expressway Soojungsan Tunnel Daegu East Circular Road Incheon Grand Bridge Seoul Chuncheon Expressway Woomyunsan Tunnel Seoul Subway #9 Yongin Seoul Expressway Seosuwon-Osan-Pyungtaek

Expressway

SK E&S West Sea Power/West Sea Water Kukdong Building Schroder Asian properties MGPA

China/Taiwan

Taiwan Broadband Communications Changshu Xinghua Port First China Property Group Schroder Asian properties MGPA Retail malls

Hong Kong

Schroder Asian properties MGPA Macquarie Goodman Hong Kong

Wholesale Fund Japan

Hakone Turnpike Ibukiyama Driveway Schroder Asian properties MGPA Macquarie Goodman Asia Residential portfolio (own, not

managing) Singapore

Schroder Asian

properties

MMP REIT MGPA

France

Autoroutes Paris-Rhin-Rhône Energy Power Resources

(Europe)

French windfarms MGPA

Italy

MGPA Macquarie Office

Germany

Warnow Tunnel TanQuid (tank storage

business)

MGPA Macquarie Office Macquarie CountryWide

Luxembourg

MGPA

Netherlands

NRE* European Directories# Obragas Net* Netbeheer Haarlemmermeer* MGPA

Poland

Deep Sea Container Terminal MGPA Macquarie CountryWide

Portugal

Tagus Crossings

Spain

Itevelesa

Sweden

Arlanda Express

Switzerland

MGPA

Roads Utilities Transport services Real Estate Communications Airports Other

As at June 2007. *Subject to financial and customary closing arrangements *** Includes wind, hydro and biomass power assets #European Directories also in Sweden, Finland, Austria, Czech Republic, Slovakia, Denmark & France - In some cases, Macquarie or a Macquarie-managed fund has partial interest in an asset ^MPR assets no longer under management following acquisition of MPR by ProLogis in July 2007

Australia

Prospect Water Dampier – Bunbury Multinet United Energy Distrib. AlintaGas Networks Broadcast Australia Macquarie Regional Radioworks Southern Cross Broadcasting Transtoll Sydney Airport Westlink M7 Eastlink Retirement Care Australia RVG Sydney Retirement Services Australia Zig Inge Macquarie Office Macquarie CountryWide Macquarie Leisure MREEF Macquarie Direct Property

Malaysia

MGPA

80% of assets in specialist funds and syndicates are located outside Australia

SLIDE 18

18

Americas

23%

Asia Pacific

6%

Europe, Africa & Middle East

51%

Australia

20%

80% of assets in specialist funds and syndicates are located outside Australia

Comprises listed and unlisted specialist infrastructure, real estate and other specialist assets under management (proportional ownership enterprise value) as at 30 June 2007

SLIDE 19

19

Comprises listed and unlisted specialist infrastructure, real estate and other specialist assets under management as at 30 June 2007

Tourism/Leisure & Residential Real Estate

1%

A Broad Range of Specialist Assets Under Management

Commercial Real Estate

6%

Industrial Real Estate

2%

Communications Infrastructure

11%

Utilities

21%

Airports

12%

Roads

22%

Other

15%

Investment Funds

5%

Retail Real Estate

5%

SLIDE 20

20

Income* Staff numbers

As at 31 March 2007 * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses. *Does not include Giuliani Capital Advisors staff integrated in April 2007

Growing in the Americas

Income* up 105% on prior year to $A1.0 billion

200 400 600 800 1000 1200 2003 2004 2005 2006 2007 $Am 100 200 300 400 500 600 700 800 900 1000 2003 2004 2005 1905 2007* Headcount

SLIDE 21

21

Sao Paulo Toronto Houston San Francisco Seattle Vancouver Miami Winnipeg Montreal Carlsbad Savannah Denver Calgary Chicago Los Angeles San Diego Jacksonville San Jose New York Boston Irvine

Focused businesses in the Americas

Staff: 1,248

• Corporate finance & advisory
• Institutional cash equities & research
• Infrastructure funds mgt
• Infrastructure finance & advisory
• Real estate funds mgt
• Real estate structured finance & advisory
• Real estate development
• Equity derivatives
• Energy capital (oil and gas finance)
• Commodity derivatives and structured products
• Equipment leasing
• Physical gas trading
• Power trading
• Emerging market bond broking
• Residential mortgages
• Other specialist funds management

Atlanta Troy

Staff numbers at 31 Aug 2007

SLIDE 22

22

Income* Staff numbers

200 400 600 800 1000 1200 1400 1600 2003 2004 2005 2006 2007 $Am 100 200 300 400 500 600 700 800 900 1000 2003 2004 2005 2006 2007 Headcount

Growing in Europe, Africa & the Middle East

Income* up 100% on prior year to $A1.4 billion

Submitted application to UK Financial Services Authority in July to set up UK licenced banking entity

As at 31 March 2007 * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses.

SLIDE 23

23

Abu Dhabi Milan Dublin Amsterdam London Paris Geneva Cape Town Frankfurt Dubai Munich Johannesburg Rome Zurich Vienna

Focused businesses in Europe, Africa & the Middle East

Staff: 1,147

Staff numbers at 31 Aug 2007 . *No Macquarie office in Moscow, JV sfaff not included in headcount

• 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

Manchester Moscow* (JV)

SLIDE 24

24

Income* Staff numbers

Growing in Asia-Pacific

Income* up 26% on prior year to $A1.1 billion

200 400 600 800 1000 1200 2003 2004 2005 2006 2007 $Am 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2003 2004 2005 2006 2007 Headcount

As at 31 March 2007. Includes New Zealand. * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses.

SLIDE 25

25

Hsinchu Beijing Tianjin Seoul Shanghai Tokyo Manila Hong Kong Bangkok Labuan Kuala Lumpur Singapore Jakarta Mumbai

Broad investment banking in Asia

Staff: 1,918

• Corporate finance & advisory
• Equity capital markets
• Institutional cash equities & research
• Infrastructure, real estate and other

specialist funds

• Equity derivatives
• Futures broking
• Real estate structured finance & advisory
• Real estate development
• Leasing
• Treasury & commodity derivatives
• Financial products

Taipei

Staff numbers at 31 Aug 2007. Includes New Zealand

New Delhi

SLIDE 26

26

Income* Staff numbers

Growing in Australia

Income* up 31% on prior year to $A2.8 billion

500 1,000 1,500 2,000 2,500 3,000 2003 2004 2005 2006 2007 $Am

1,000 2,000 3,000 4,000 5,000 6,000 7,000 2003 2004 2005 2006 2007 Headcount

As at 31 March 2007 * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses.

SLIDE 27

27

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 28

28

Purpose of the restructure

The Restructure is intended to address two key objectives simultaneously:

— position the Macquarie Group to continue to pursue the strategies that have been responsible for its strong growth; and — assist the Macquarie Group in meeting its obligations to the Australian Prudential Regulation Authority (‘APRA’)

SLIDE 29

29

Summary of the proposal

pÜ~êÉÜçäÇÉêë

j~Åèì~êáÉ=_~åâ= iáãáíÉÇ= _~åâáåÖ=ÉåíáíáÉë kçåJÄ~åâáåÖ=ÉåíáíáÉë

pÜ~êÉÜçäÇÉêë

j~Åèì~êáÉ=dêçìé= iáãáíÉÇ=

_~åâáåÖ=dêçìé kçåJ_~åâáåÖ=dêçìé

_~åâáåÖ=ÜçäÇáåÖ= Åçãé~åó kçåJÄ~åâáåÖ=ÜçäÇáåÖ= Åçãé~åó= j~Åèì~êáÉ=_~åâ= iáãáíÉÇ= _~åâáåÖ=ÉåíáíáÉë kçåJÄ~åâáåÖ=ÉåíáíáÉë=

Corporate structure BEFORE Corporate structure AFTER

SLIDE 30

30

Proposed establishment of Macquarie Group Limited (NOHC) on track

• We are on track

— Formal APRA approval received — Court orders convening the meetings of shareholders and optionholders received — All necessary private tax rulings and draft class rulings received — Provisional ratings received. Definitive ratings will be applied by the Rating Agencies upon establishment of Macquarie Group Limited — MBL short term ratings remain unchanged at A-1 / P-1 / F-1 — Commitments obtained for a term bank facility of $A8b from a syndicate of major international and Australian banks — The proposal remains subject to the approval of the Federal Treasurer. Relevant applications have been lodged. — EGM on 25 October to seek shareholder and optionholder approvals S&P Moody’s Fitch Macquarie Group Limited (NOHC) A- A2 A Macquarie Bank Limited A A1* *Positive ratings outlook post restructure A+

SLIDE 31

31

Proposed establishment of Macquarie Group Limited (NOHC) on track

• Macquarie’s strong emphasis on risk management to continue to apply throughout the Group
• Macquarie Group Limited will be regulated by APRA as a NOHC
• As previously advised:

— No major change to senior management or business strategy — No significant release of capital anticipated

• Further details to be contained in Explanatory Memorandum to be sent to shareholders in late

September

SLIDE 32

32

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 33

33

Comment on global market conditions

Credit markets

— Significant deterioration in global debt capital markets’ ability to transact and fund structured debt — Funds managers and other intermediaries are preserving liquidity – sharply reduced appetite for financial intermediary term investments — Banks are now funding much of what used to be placed in the non-bank sector — Transaction levels are lower — Credit spreads have widened and cost of funds has increased — Credit markets are distinguishing much more between regulated and non-regulated financial intermediaries — Quality funding transactions are still taking place on satisfactory terms

Equity markets

— High volatility in equity markets globally — Very high trading volumes in Asia and Australia (retail and institutional) — Future impact of credit market disruption is uncertain

SLIDE 34

34

• Industry transaction flow

— M&A cautious — ECM subdued — Reduced private equity activity

• Global real estate

— US residential prices have suffered and volumes have fallen — Rising spreads affecting mortgage rates generally — Investor interest remains strong across all non-residential sectors — Upturn in Australian east coast residential ‘inner ring’ — Significant funds available for appropriate investment

• Volatility positive for most global financial markets activities except in debt capital markets where

transaction volumes, liquidity and debt book positions have been impacted by broader market turmoil

• Australia and Asia much less affected than US or Europe
• Continuing competitive environment for staff

Comment on global market conditions

SLIDE 35

35

Conservatively capitalised and operating very profitably

Conservatively capitalised — Tier 1 capital ratio at 31 August in excess of 15% Well funded All Groups are operating profitably No unusual provisions or write downs Businesses are diversified by product and geography Continuing to grow staff – currently approximately 11,000* Held For Sale assets on balance sheet: $A628m at 31 August 2007 ($A1,370m at 30 September 2006)

— Expect to realise for greater than book value

Risk-weighted asset growth slower Expect strategic opportunities in the current environment

* At 31 August 2007

SLIDE 36

36

No unusual trading exposures

Main business focus is making returns by providing services to clients rather than by principal trading No material exposures not already known to investors No problem trading exposures No material problem credit exposures No exposure to Structured Investment Vehicles (SIVs) Only modest holdings of AAA and AA rated CLOs and CDOs ($US300m approx) No problems with debt underwritings No underwriting of leveraged loans Very little underwriting of corporate loans Only modest credit exposures to the hedge fund industry

SLIDE 37

37

All Groups operating profitably

Investment Banking Group

— M&A and ECM pipelines reasonable — Very strong M&A completion in first quarter (to June) — Australian ECM activity lower than first quarter - partly seasonal — Solid pipeline in Asia — Cash equities – excellent volumes in Australia and Asia — Profitable asset sales in progress — Continued growth in Investment Banking Funds and assets performing well (See slides 40-41)

Equity Markets Group

— Benefiting from current volatility — Generally high trading volumes in Australia and Asia

SLIDE 38

38

All Groups operating profitably

Treasury and Commodities

— Benefiting from current volatility — Increased volumes across most businesses except Debt Markets

Real Estate Group

— All major businesses continue to perform well — Some profitable disposals completed — Continued growth in Real Estate Funds and assets performing well (See slides 40-41) — Well positioned to capitalise on counter-cyclical opportunities associated with stress in some market sectors

SLIDE 39

39

All Groups operating profitably

• Financial Services Group

— Record retail broking volumes — Large June quarter inflows into Wrap and Cash Management Trust due to superannuation reforms ($A17b) — Seasonal outflows post June 30 as expected — CMT up 26% from $A14.1b (31 Mar 2007) to $A17.7b (31 Aug 2007); Wrap up 13% from 23.2b (31 Mar 2007) to $A26.2b (31 Aug 2007)

• Funds Management Group

— Good fund performance relative to benchmarks — Credit funds performed especially well relative to market

• Banking and Securitisation

— Record volumes in margin lending but expecting more subdued growth for remainder of the year — Launch of credit card business in April 2007 — Deposit volumes well up — Challenging funding markets for mortgages but high quality assets

SLIDE 40

40

Continued growth of specialist funds

Asset Performance

— Assets continue to perform well

Refinancings

— Still being achieved on reasonable terms — Investment Banking Funds: approximately 2% of total asset debt due for refinancing over next 12 months — Real Estate Funds: approximately 3% of total asset debt due for refinancing over next 12 months

Acquisition Pipeline

— Track record and experience position funds well to pursue opportunities — Deep expertise in debt markets — Strong investment discipline — Significant capital available for investment

SLIDE 41

41

Continued growth of specialist funds

Capital raised from investors

— $A12.4b total funds raised April to August 2007 (77% international, 77% unlisted) — $A4.0b for Investment Banking Funds* (72% international, 35% unlisted) — $A2.8b for Real Estate Funds^ (88% international, 91% unlisted) — $A5.6b of other specialist funds (including Financial Products) — Other fund raisings in progress

Significant capital available for investment

— Investment Banking Funds $A9.6b** — Real Estate Funds approx $A3.7b^

New funds being developed across existing and new markets

As at 31 August 2007. * Capital raised by Macquarie and joint venture fund manager partners, including approx. A$1b of Exchangeable Convertible Bonds (ECBs) issued by MCG. **Listed funds - cash available for investment; unlisted funds- investor commitments less capital invested or committed to investments. For jointly managed funds the amount is representative of Macquarie's share in the JV manager. ^Macquarie and associates

SLIDE 42

42

Outlook – expect record half year result for the six months ending 30 September 2007

Expect record first half, up approximately 40% on pcp Expect second quarter to be up on pcp; as in most years, down on very strong first quarter Investors should exercise caution in drawing inferences from the expected first half result for the full year result especially because of difficulty in predicting market conditions for the remainder of the financial year Planning for strategic initiatives: — Group level management and central strategy unit tasked to identify opportunities — Slower risk-weighted asset growth — Continuing to hire quality staff especially in areas where we see special

• pportunities

— Possible boutique acquisitions

SLIDE 43

Appendix

SLIDE 44

44

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 45

45

Operating income

49% increase on prior year to $A7.2b

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2002 2003 2004 2005 2006 2007 $Am Asset and equity investment realisations Other income Net interest income Net Trading income Fee and commission income

Years ended 31 March

SLIDE 46

46

Fee and commission income

25% increase on prior year to $A3.5b

200 400 600 800 1000 1200 1400

Base fees Performance fees M&A, Advisory and Underw riting Brokerage and Commissions Wrap and Other Administration Fee Income Financial Products Banking, Lending & Securitisation Other fee and commission income

$Am Mar 2005 Mar 2006 Mar 2007

Years ended 31 March

SLIDE 47

47

Performance fees

Funds management income

AUM up 41% on prior year to $A197b Base Fees up 42% on prior year to $A785m

20 40 60 80 100 120 140 160 180 200 2002 2003 2004 2005 2006 2007 AUM ($Ab) 100 200 300 400 500 600 700 800 Base Fees ($Am) Infrastructure Real estate Other specialist Securities - retail Securities - wholesale Base fees

AUM & Base fees

Years ended 31 March

100 200 300 400 500 600 700 800 2002 2003 2004 2005 2006 2007 $Am MMG MAP MCG MIC MIG MIIF MPT Real Estate Other specialist FSG/FMG

SLIDE 48

48

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

SLIDE 49

49

Net trading income

20% increase on prior year to $A1,047m

Years ended 31 March

Mar 07 $Am Mar 06 $Am Change % Equities 765 295 120 112 1,292 (61) (184) 1,047 526 45 Commodities 197 50 Foreign exchange 152 (21) Interest rate products 84 33 Total Trading Income (before adjusting for accounting impacts) 959 35 Revaluation of economic hedges 29 (310) Accounting for swaps (112) 64 Net Trading Income (as reported) 876 20

Trading income (before adjusting for accounting impacts)

200 400 600 800 1,000 1,200 1,400 2002 2003 2004 2005 2006 2007 $Am

Interest Rate Products Foreign Exchange Commodities Equities

SLIDE 50

50

Net interest income 23% increase on prior year to $A728m

Loan assets

5 10 15 20 25 30 2002 2003 2004 2005 2006 2007 $Ab

Property Mortgages Margin lending & equities lending Banking Treasury & Commodities Macquarie Capital: Leasing Macquarie Capital: Other Clearing houses Other lending

Mar 2007 Mar 2006 Loan assets 495 19,607 2.52 406 14,574 2.78 Interest $Am Average Volume $Ab Spread % 116 0.52 0.35 Total interest bearing assets 715 582 104 (171) Interest $Am Average Volume $Ab Spread % Mortgage assets 544 22,248 29,645 97 79 (102) 480 Trading assets and other securities 0.54 17,881 Non-interest bearing assets 0.46 17,242 Total 544 (184) 728

Mar 07 $Am Accounting for swaps reported as trading income

(112)

Mar 06 $Am

592

Net interest income (as reported)

480

Net interest income (adjusted for accounting impacts)

• Need to consider accounting for swaps in net interest margin analysis –

provides true economic position

SLIDE 51

51

Mar 07 $Am Mar 06 $Am 306 (Akeler JV assets, Arqiva, Brussels Airport, Childcare businesses, CH4 Gas, Dyno Nobel, East London Bus Company, Macquarie Small Cap Roads, net profit interests, SFE shares, Steampacket Group, Taiwan Cable TV Investments, RP Data, other infrastructure and real estate) Other Other Gains on Macquarie Goodman Group 302

• 300

214 (18) 20 522 Profit on disposal of assets and equity investments 1,098 345 Net income from businesses held for sale 41

• Dividends, distributions and equity accounting income

326 50 (MAp, MGQ, MCW, MOF, MCG, MIIF, MMPR, etc) 99 1,866 Mar 05 $Am (34) Total 661 Asset & equity investment realisations

Income from asset & equity investment realisations and other transactions

2007 result assisted by many asset realisations, including a number of significant ones Normal part of our business, but asset sales are a swing factor

SLIDE 52

52

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 53

53

Growth in all business segments

Asset & wealth management: 27%* Investment banking: 42%*

Income up 75% on prior year Income up 39% on prior year

Financial markets: 21%*

Income up 34% on prior year

Lending: 10%*

Income up 23% on prior year

Commodities FX, futures, treasury and debt markets Mergers and acquisitions, advisory, underwriting and principal transactions Financial products Equipment and other leasing Other lending Investment banking, real estate and other specialist funds Equity derivatives Institutional cash equities Banking and securitised lending Retail and wholesale funds management and private client broking Real estate lending

* Represents contribution to total income. Year to 31 March 2007

SLIDE 54

54

Good climate for investment banking ‒ Australian and Asian equity markets performed strongly Large asset realisations and major transactions Strong performance by Australian and Asian cash equities businesses

Investment banking

Income up 75% on prior year

Year to 31 March 2007. Investment banking segment includes M&A, advisory, underwriting, institutional cash equities and financial products.

Growth in all business segments

SLIDE 55

55

31% of total operating income; 12% of total

• perating income relating to infrastructure
• approx. 3.5% of total operating income from

advisory and underwriting fees derived from investment banking and real estate funds* less than 1% of total operating income derived from MBL asset sales to investment banking and real estate funds

Year to 31 March 2007. Investment banking segment includes M&A, advisory, underwriting, institutional cash equities and financial products. * Including joint venture managed funds.

Investment banking -

M&A, advisory, underwriting and principal transactions

Growth in all business segments

SLIDE 56

56

Asset & wealth management

Income up 39% on prior year

Year to 31 March 2007. Asset and wealth management segment includes investment banking, real estate & other specialist funds, retail & wholesale funds management and private client broking. 1 Annualised return based on all capital raised, distributions paid and valuations (market capitalisation for listed funds and net asset value for unlisted funds) for IBF managed funds since inception to 31 March 2007 (listed funds as at 31 March 2007, unlisted funds as at 31 December 2006). Calculated in AUD. Cashflows converted at historic rates. 2Accumulated return on the Macquarie LPTs is calculated assuming that an investor acquired an initial portfolio on 31 March 1997 (weighted by market capitalisation at that date) and then participated (pro rata) in every capital raising undertaken by each Macquarie LPT over the period shown. Macquarie LPTs currently included in the index are MOF, MCW, MLE, MDT, MPR. Source Macquarie Real Estate as at 31 March 2007.

Growth in all business segments

Assets under management up 41% to almost $200b and resulting base fee growth Investment banking funds have delivered a compound annual return of 20.2% since inception 13 years ago1 Listed property trusts have delivered compound annual return of 17.9% over the past 10 years,

• utperforming most major global REIT indices2

Strong performance from Australian retail broking Only a small contribution from specialist funds performance fees

SLIDE 57

57

Asset & wealth management

Investment banking, real estate and other specialist funds

7% total operating income derived from investment banking and real estate funds base fees and performance fees Very few assets purchased by funds from Macquarie

Investment banking funds – less than 1% by value of assets during FY07 Real estate funds – less than 8% by value of assets during FY07

Sales between funds nominal

Investment banking funds: only two out of 33 acquisitions from another fund in FY07 (or only 5% by value) Real estate funds: no real estate transfers between funds in FY 2007 Subject to rigorous independent valuation and review process

Average gearing of assets managed by specialist funds

Investment banking funds – 58% (debt / debt + equity) Real estate funds – 48% (debt / debt + equity)

Year to 31 March 2007. Asset and wealth management segment includes investment banking, real estate & other specialist funds, retail & wholesale funds management and private client broking.

Growth in all business segments

SLIDE 58

58

Financial markets

Income up 34% on prior year

Continued strong activity across financial and commodity markets

Year to 31 March 2007. Financial markets segment includes commodities, FX, futures, treasury, debt markets and equity derivatives.

Growth in all business segments

Conditions in some equity derivative markets more challenging

SLIDE 59

59

Mortgages portfolio volumes up 24% on prior year Loan portfolio volume up 22% on prior year No exposure to US subprime mortgage market

Year to 31 March 2007. Lending segment includes banking & securitised lending, equipment & other leasing, real estate lending and other lending.

Growth in all business segments

Lending

Income up 10% on prior year

SLIDE 60

60

Agenda

Overview Financial performance Growing internationally Proposed restructure General update and outlook Appendices

— Earnings drivers — Analysis by business segment — Restructure – further detail

SLIDE 61

61

Corporate structure BEFORE

j~Åèì~êáÉ êáÉ=_~åâ= â=iáã áãáí áíÉÇ

• áëâ=j~å~ÖÉãÉåí

cáå~åÅá~ä=léÉê~íáçåë `çãé~åó=pÉÅêÉí~êá~ä `çêéçê~íÉ=`çããìåáÅ~íáçåë eìã~å=oÉëçìêÅÉë fåÑçêã~íáçå=qÉÅÜåçäçÖó q~ñ~íáçå _ìëáåÉëë=pÉêîáÅÉë qêÉ~ëìêó _ìëáåÉëë=fãéêçîÉãÉåí=C=píê~íÉÖó pÉííäÉãÉåíë fåîÉëíçê=oÉä~íáçåë _~åâáåÖ=~åÇ= pÉÅìêáíáë~íáçå= dêçìé bèìáíó= j~êâÉíë=dêçìé cìåÇë= j~å~ÖÉãÉåí= dêçìé

• É~ä=

bëí~íÉ=dêçìé qêÉ~ëìêó=~åÇ= `çããçÇáíáÉë= dêçìé cáå~åÅá~ä =pÉêîáÅÉë=dêçìé fåîÉëíãÉåí= _~åâáåÖ=dêçìé

dêçìéJïáÇÉ= É=ëÉêî ÉêîáÅÉë ÅÉë

SLIDE 62

62

Corporate structure AFTER

kçí kçíÉëW

NlÑÑëÜçêÉJÑçÅìëÉÇ=íê~ÇáåÖI=áåíêçÇìÅíáçåI=~êê~åÖáåÖI=ëíêìÅíìêáåÖ=~åÇ=êÉä~íÉÇ=ëÉêîáÅÉë=Ñçê=ÉèìáíóI=Éèìáíó=ÇÉêáî~íáîÉ=~åÇ=êÉä~íÉÇ=éêçÇìÅíë OrpJÄ~ëÉÇ=ÄêçâÉê=ÇÉ~äÉê=~ÅíáîáíáÉëI=^ëá~å=ÑìíìêÉë=ÉñÉÅìíáçå=~åÇ=ÅäÉ~êáåÖI=~åÇ=^ëá~å=çêáÖáå~íáçå=çÑ=íêÉ~ëìêó=~åÇ=ÅçããçÇáíó=íê~åë~Åíáçåë

j~Åèì~ ì~êáÉ=dêçìé=iá iáãáíÉÇ

• áëâ=j~å~ÖÉãÉåí

cáå~åÅá~ä=léÉê~íáçåë `çãé~åó=pÉÅêÉí~êá~ä `çêéçê~íÉ=`çããìåáÅ~íáçåë eìã~å=oÉëçìêÅÉë fåÑçêã~íáçå=qÉÅÜåçäçÖó j~êâÉíë=léÉê~íáçåë q~ñ~íáçå _ìëáåÉëë=pÉêîáÅÉë qêÉ~ëìêó _ìëáåÉëë=fãéêçîÉãÉåí=C=píê~íÉÖó pÉííäÉãÉåíë fåîÉëíçê=oÉä~íáçåë kçå kçåJ_~åâáåÖ=dêçìé _~åâáåÖ= Ö=dêçì çìé === ====== ====== ====== ===== ===== ====== ====== ===aáîáëáçåë `çêéçê~íÉ=cáå~åÅÉ==========cáå~åÅá~ä=mêçÇìÅíë j~Åèì~êáÉ=`~éáí~ä=========j~Åèì~êáÉ=pÉÅìêáíáÉë= cáå~åÅÉ ==================fåîÉëíãÉåí=_~åâáåÖ=cìåÇë _~å ~åâáåÖ=~å ~åÇ=pÉÅì ÉÅìêáíáë~í ~íáçå= dê dêçìé bèìáíó=j =j~ê ~êâÉíë íë=d =dêçìé cá cáå~ å~åÅá åÅá~ä=pÉêîáÅÉë=dêçìé ìé cìåÇ cìåÇë=j~ j~å~ÖÉãÉåí= åí=dêç êçìé

• É~ä

~ä=b =bëí~í ~íÉ=dêçìé qêÉ~ëìêó=~åÇ=`çããçÇáí áíáÉ áÉë= dê dêçìé fåîÉ îÉëíãÉåí åí=_~åâáåÖ åÖ=dêçìé ìé `Éêí~áå áå=~Åíáîáí áíáÉ áÉë= ë= Ñê ÑêçãW

—=bèìáíó=j~êâÉíë=dêçìéN

Ô=qêÉ~ëìêó=~åÇ==

====`çããçÇáíáÉë=dêçìéO

dê dêçìéJïáÇ JïáÇÉ=ëÉêîáÅÉë

SLIDE 63

63

Governance

S h S h a re d e d S e r S e rv ic e s e s (2 878 sta ff)

E x e c e c u t iv e C C o m m it t t t e e e e B o B o a r d

D avid S C lark e (N on-E xecutive C hairm an) Allan E M oss (M anaging D ire ctor) Laurence G C ox Pe ter M Kirby 1 Catherine B Livingstone 1 Allan E M oss Andre w J D ow ne G reg C W a rd Kim B urk e M ichael C arapiet H Kevin M cC ann 1 J ohn R N iland1 H e len M N ugent1 Pe ter H W arne 1 N ic holas W M oore N ic k R M inogue Pe ter J M aher W R ichard Sheppa rd E x e c u t i t iv e C C o m m it t e t t e e N o n - n - B a n k n k in g n g H H o ld C o B a n k in in g H H o ld ld C o O p O p e r a t io n s O p e r e r a t a t io n s M a c q u a u a r ie B B a n k n k L i L im it e d B o B o a r d Dav id S Clarke (NEC) W R ichard S hep p ard (M D ) A llan E M o ss Laurence G Co x P eter M K irb y 1 W R ichard S hep p ard A llan E M o ss A nd rew J Do w ne G reg C W ard Catherine B Liv ing sto ne 1 H K ev in M cCann1 Jo hn R Niland 1 Helen M Nug ent 1 P eter H W arne 1 Nick R M ino g ue P eter J M aher K im B urke

M a c q u a u a r i e G e G r o u p L i L im i te d

• 1. Independent non-executive director

SLIDE 64

64

Indicative pro-forma financials

31 M March rch 2 2007 Pro f forma a co cons nsolidat ated ed bala lanc nce shee sheet (s (summary)*($A ry)*($Am) Bank Banking ing Gr Group p No Non- Bank Banking Gr Group p MG MGL ( (Pare arent en entity) Co Consoli

• lidatio

ion ad adju justments s Pr Pro-f

• -forma

rma Macq cqua uari rie e Gr Group p Total assets 120,288 18,394 28,029 (28,036) 138,675 Total liabilities 115,914 15,242 9,154 (9,154) 131,156 Equity 4,374 3,152 18,875 (18,882) 7,519 31 Ma March 20 h 2007 07 Pro fo forma a co consolidat ated i ed income s statem ement A$ A$ milli million

• n

Bank Banking ng Gr Group p No Non-Ba Bankin ing g Gr Group p Co Consolid

• lidatio

ion ad adju justments s Pro-f Pro-forma Mac Macqu quar arie Gr Grou

• up

p Total operating income 3,276 3,885 (37) 7,124 Total operating expenses (2,557) (2,710) 37 (5,230) Net profit before tax 719 1,175

• 1,894

Income tax expense (61) (305)

• (366)

Net profit after tax 658 870

• 1,528

Profit attributable to equityholders 603 868

• 1,471

Profit attributable to ordinary equityholders 572 868

• 1,440

*Certain equity transactions occurring after 31 March 2007 have not been included in the pro-forma balance sheet on the basis that they are not connected with the proposed

• Restructure. These post balance date transactions include the May 2007 placement and share purchase plan of approximately A$829 million and the declaration and subsequent

payment of the Macquarie Group’s 2007 final dividend of A$482 million. The equity of MBL has been split between the Banking and Non-Banking Groups. This has been reflected as a reduction of capital from the Banking Group to MGL. MGL has subsequently injected this capital into the Non-Banking Group as a capital contribution

SLIDE 65

65

Funding structure

aÉÄí bèìáíó bèìáíó=C=eóÄêáÇ=bèìáíó

j~Åè j~Åèì~ ì~êáÉ êáÉ=dêçìé çìé=iáãáíÉÇ

aÉÄí aÉÄí=C=bèìáíó aÉÄí=C=bèìáíó

_~åâáåÖ= _~åâáåÖ=eçäÇ`ç eçäÇ`ç kçåJ_~å kçåJ_~åâáåÖ=eçäÇ áåÖ=eçäÇ`ç `ç

aÉÄí=C=bèìáíó aÉÄí=C=eóÄêáÇ=bèìáíó bèìáíó

bib ëìÄëáÇá~êáÉë kçåJbib ëìÄëáÇá~êáÉë kçåJ_~ _~åâ åâáå áåÖ=dê Ö=dêçì çìé

aÉÄí=C=bèìáíó

j~ j~Åèì~êáÉ=_~ Åèì~êáÉ=_~åâ= åâ=iáãáíÉÇ iáãáíÉÇ jf jfci ci

bèìáíó _êáÇÖáåÖ=aÉÄí