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Dear Shareholder
Macquarie Group recently provided an update on its outlook for the current year profit, balance sheet
funding and medium term business focus at its regular operational briefing to market analysts. This letter
provides you with a summary of the briefing.
At the briefing we reported that Macquarie currently anticipates profit for the year to 31 March 2009 will be
approximately $0.9 billion, compared to a record result of $1.8 billion in the previous year when market
conditions were strong. The anticipated result is after an estimated $2.0 billion of write-downs and
impairment charges for the full year reflecting the severe downturn in financial markets. Operating income
for the year is expected to be down 15% (before impairments) indicating that the underlying operating
performance of the business is sound. The 2009 full year result will be announced on 1 May 2009.
Extremely challenging market conditions have adversely impacted levels of business activity and profitability
for almost all Macquarie’s business groups. Notwithstanding these conditions, Macquarie continues to
operate profitably and our business groups are busy and continuing to pursue new opportunities arising
from market conditions. We should note that forecasting during current market conditions is extremely
difficult and the outlook remains subject to significant swing factors previously identified, including market
conditions, asset realisations, completion rate of transactions and asset prices.
Balance sheet strength is of critical importance for all financial institutions at this time. Since
30 September 2008, Macquarie has continued to strengthen its balance sheet funding. At February 2009,
Macquarie had substantial liquidity with cash and liquid assets exceeding $32.1 billion. This significantly
exceeds its short-term wholesale liabilities totalling $12.7 billion. Macquarie’s regulatory capital position
remains strong with a $2.9 billion buffer of capital in excess of its minimum capital requirements. In
summary, we remain very well funded and well capitalised. Macquarie Bank Limited has seen strong growth
in deposits and has launched a number of new deposit products which we believe are very attractive to
investors.