Banking and Financial Services  provides a diverse range of personal banking, wealth management and business banking products and services to retail clients, advisers, brokers and business clients. 

Banking and Financial Services delivered a net profit contribution of $A260 million, up seven per cent on the prior year. Banking and Financial Services’ Australian mortgage portfolio increased by 47 per cent to $A17.0 billion, which represents one per cent of the Australian mortgage market. Its highly-ranked Australian wrap platform increased its funds under administration by 50 per cent to $A37.7 billion from $A25.1 billion. This was driven by 20 per cent organic growth and market movements as well as the migration of Perpetual’s private wealth administration platform in April 2013. Banking and Financial Services continued to hold a strong position in wealth management and full-service retail stockbroking in Australia and increased its retail deposits by seven per cent to $A33.3 billion. Initiatives during the year included the acquisition of a 25 per cent stake in mortgage aggregator Connective; the establishment of Macquarie Pacific Funding; and the sales of Macquarie Private Wealth Canada and Banking and Financial Services’ 19.9 per cent interest in OzForex via an initial public offering (IPO). 

Macquarie Securities  is a global institutional securities house with strong Asia-Pacific foundations. 

Macquarie Securities delivered a net profit contribution of $A107 million, up from a net loss of $A50 million in the prior year. Macquarie Securities experienced increased market volumes and equity capital markets (ECM) activity during the year, up from subdued levels in the prior year, and benefited from a lower level of losses from the wind down of legacy businesses. Macquarie was ranked No. 2 for Australian ECM transactions for calendar year 2013, completing more IPOs than any other financial institution. Macquarie Securities maintained its leading position for Australian equities among institutional investors globally, maintaining or improving its market share in key regions. Subdued volatility in derivatives markets resulted in low levels of client demand. Macquarie Securities continued to build on its expertise as one of the largest derivative warrant issuers in the Asia-Pacific region, holding No. 1 market share for listed warrants in Singapore, No. 3 in Thailand and No. 6 in Hong Kong. 

Macquarie Capital offers expertise across a range of advisory and capital raising services. 

Macquarie Capital delivered a net profit contribution of $A280 million, up 87 per cent on the prior year. It advised on 450 transactions worth $A89 billion and for calendar year 2013 was ranked No.1 in Australia for announced and completed mergers and acquisitions (M&A) transactions and No.1 in South East Asia for announced M&A transactions. During the year, Macquarie Capital advised a consortium on the Queensland Government’s 32-year Public Private Partnership (PPP) concession to build 75 new trains and provide maintenance services; Asian Pay Television Trust’s $US1.1 billion IPO on the Singapore Exchange; WMS Industries’ $US1.5 billion sale to Scientific Games and SHFL Entertainment’s $US1.3 billion sale to Bally Technologies, the two largest ever transactions in the US gaming equipment sector; and the £600 million Mersey Gateway PPP project in the United Kingdom. 

Fixed Income, Currencies and Commodities  provides a variety of trading, risk management, sales, structuring, financing and market analysis and strategy services. 

Fixed Income, Currencies and Commodities delivered a net profit contribution of $A726 million, up 29 per cent on the prior year. The improved result reflected a 58 per cent increase in income from commodities related activities, driven by stronger client hedging and trading opportunities from increased volatility in energy markets, coupled with falling precious metals prices and growth in physical metals financing activities. Continued subdued mining equity markets and generally lower metals and bulk commodities prices impacted the timing of asset realisations, new project financings, and resulted in further equity impairments in the Metals and Energy Capital business, albeit an improvement on the prior year. The credit environment was mixed with US credit market volatility improving during the fourth fiscal quarter. Foreign exchange and futures markets experienced improved volatility and volumes compared to the prior year. 

## Business strategies 

Macquarie's core business involves leveraging the deep expertise and insight of our people to deliver value to clients in selected areas of financial services. 

The business strategy is to focus on the medium term and is built on: providing services to clients; aligning the interests of shareholders, investors and staff; utilising a conservative approach to risk management; continuing to focus on growth and evolution; diversifying by business and geography; and adapting to change. This approach provides flexibility to enter into new business sectors and regions as opportunities emerge and to expand existing businesses in selected areas of expertise. 

Macquarie seeks to encourage growth and diversity by allowing strategy to be driven in the individual businesses at the operating level. However, equity, credit, market, liquidity, compliance and operational risks are centrally managed by the Risk Management Group, whose responsibility is to implement appropriate assessment and management policies in respect of these risks throughout the Group. 

Macquarie's business has evolved and changed to adapt to market conditions. Macquarie examines investment opportunities and has undertaken a number of strategic acquisitions in response to changing market conditions and opportunities. Macquarie will continue to assess strategic acquisition and merger opportunities and other corporate transactions as they arise, along with exploring opportunities for further organic growth and diversification in its existing businesses in the medium term. 

## Prospects for future financial years 

While the impact of future market conditions makes forecasting difficult, it is currently expected that the combined net profit contribution from operating groups for the financial year ending 31 March 2015 will be up on the financial year ended 31 March 2014, broadly offsetting the gain relating to the SYD distribution realised in the financial year ended 31 March 2014. 

