Latest news with #MacquarieGroup
Business Times
19 hours ago
- Business
- Business Times
Macquarie ‘Millionaires Factory' put at risk by investor revolt
[SINGAPORE/MELBOURNE] Macquarie Group's long vaunted money-making machine for top bankers is showing signs of strain. Known as the 'Millionaires' Factory', the Australian financial giant has for years awarded more generous pay to its senior management and dealmakers than rivals across Asia. Former commodities head Nick O'Kane famously earned more than JPMorgan Chase chief executive officer Jamie Dimon, before he left last year. A recent string of lapses in risk management and senior departures are putting that at risk. Macquarie faces potential penalties amounting to hundreds of millions of US dollars after drawing the ire of regulators from the US and UK to Australia. Concerns are also mounting among investors as they demand more accountability from management. The biggest blow came last Thursday (Jul 31) when more than a quarter of its shareholders, including some of the nation's biggest pension funds, rejected the bank's executive remuneration plan at an annual meeting. The humiliating rebuke to the board increases the risk of a confidence vote next year. 'We expect greater transparency around how regulatory compliance issues have affected the profit share across all levels of the company,' said Debby Blakey, head of the Hesta fund which holds roughly 0.8 per cent of Macquarie and voted against the pay plan. 'This can build confidence that the company is taking action in response to the issues raised.' Earlier that same day, Macquarie investors and its own executives were shocked by news that chief financial officer Alex Harvey will retire, according to sources familiar with the matter. Harvey, who spent nearly three decades at the firm, was seen as ambitious and hard-driving by colleagues, and until recently was considered a top candidate to eventually run the bank, they said, asking not to be named discussing private matters. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The stakes are high for chief executive officer Shemara Wikramanayake to fix the problems at one of the world's most complex financial empires. From its start as a unit of UK-based Hill Samuel & Co in 1969, it now has operations spanning energy and gas trading to private markets and infrastructure investments. It also manages close to A$1 trillion (S$835 billion) in assets. Pressure is building on the four-decade veteran to take a heavier hand and discipline bankers, while showing she can recapture earlier growth momentum, according to more than a dozen investors, analysts, current and former staff interviewed by Bloomberg. Macquarie declined to comment. Already, the regulatory probes have hampered the A$83 billion firm. Australia's so-called Big Four banks' shares have benefitted from the sector's reputation as a haven amid tariff wars, but Macquarie has fallen 2 per cent this year. Still, some fund managers say their holdings in Macquarie offer global exposure that's unmatched by the domestic banks. The timing and style of Harvey's retirement announcement at age 54 raised questions, with the news nestled between a results update and the outlook in Thursday's statement. The country's highest-paid CFO, his responsibilities were expanded in January to include people and engagement, requiring him to protect and promote Macquarie's reputation globally. Harvey, a former tech and media investment banker who later headed the firm's Asia operations, was tired of the daily rigour, according to sources who have spoken to him. That comes as Wikramanayake is likely to extend her tenure amid the present uncertainty, they said. Harvey was not available for comment. At last week's annual meeting, chairman Glenn Stevens batted away assertions his team had done too little to clip executive pay when things went wrong in recent years. 'We found a problem, we owned the problem, and we have moved to address it,' said Stevens, a former central bank governor. He added that more may be done in the coming months to curb bonuses after a lawsuit filed by the markets regulator. While Wikramanayake's A$24 million pay package for the year ended Mar 31 was trimmed, her other nine key managers were largely unaffected. They drew more than A$100 million in combined remuneration, which is a mix of fixed pay and performance-linked shares and bonuses. Macquarie's board and leadership have 'turned a blind eye for a long time because they were making so much money and nobody was going to do anything to them', said Andy Schmulow, an associate professor at the University of Wollongong who specialises in conduct risk in financial services. The suit filed in May alleged the firm misreported millions of short sales for more than 14 years, a move that carries a penalty as high as A$783 million. Joe Longo, chairman of the Australian Securities & Investments Commission, has accused the firm of complacency and hubris in its compliance culture. Macquarie said it's working on an improvement plan. There are other headaches outside Australia. In Germany, the firm is ensnared in an industry-wide investigation related to dividend trading. About 100 current and former staff have been designated as suspects by authorities, and Macquarie is facing a number of civil claims. In the US, Macquarie paid a fine of about US$80 million in September to settle charges including overvaluing collateralised mortgage obligations. In the UK, its British unit was penalised £13 million (S$22 million) after a junior trader on the London metals desk booked fictitious trades. Overall, more than 50 people were fired in the last fiscal year for improper conduct or policy breaches, among the roughly 140 cases reviewed, according to a bank presentation. Some pay has been withheld from executives due to lapses in the US, according to Stevens. Meanwhile, regulatory compliance spending at the Sydney-based firm has more than doubled in the past five years to about A$1.2 billion, a separate presentation showed, even as it grapples with tougher capital requirements. The shareholder dissent 'reflects ongoing concerns about the alignment between pay and performance, as well as expectations for transparency and accountability', according to the Australian Shareholders' Association CEO Rachel Waterhouse. One Macquarie institutional investor who declined to be identified said that the regulator may be much tougher on the bank in the future when it comes to liquidity and capital requirements. An executive at another big shareholder was supportive of the firm's pay package, reasoning that compensation needs to be competitive with big Wall Street firms. Macquarie's woes add to a litany of regulatory probes at Australian firms, many of which have struggled to shed their cowboy culture. At ANZ Group Holdings, a string of bad trader behaviour, including alcohol and substance abuse, prompted the regulator to impose punitive capital requirements and eventually led to the departure of CEO Shayne Elliott. Even the stock exchange operator, ASX, is under review for 'repeated and serious' failures in governance and risk management. For Macquarie, the spate of problems has rekindled questions about who will ultimately succeed Wikramanayake, 62. In her seven years at the helm, she has forged a reputation that some who have worked with her labelled as a steel hand in a white glove, able to hold her own in an environment full of risk takers. Other senior bankers, however, say she's often hands-off and dispassionate, leaving her reports to make their own decisions. Harvey's exit leaves asset management head Ben Way and Macquarie Capital chief Michael Silverton as among the top CEO replacement candidates, the sources familiar said. Wikramanayake needs to convince the market Macquarie can keep driving growth, even as it reins in risks. The firm's profit rose 5 per cent to A$3.7 billion in the year ended Mar 31, though that was lower than the record A$5.2 billion notched two years earlier when it rode volatility in commodities markets. The bank has replaced O'Kane with Simon Wright, whose division saw a 12 per cent decline in profit last fiscal year and has been hit by key people leaving its North American team. The commodities and global markets remain far and away the biggest earnings contributor. Analysts at JPMorgan worry about Macquarie's core franchise performance, including market share losses. It's 'hard not to be more sceptical' about achieving its targets, they said in a note this month. They see the firm's regulatory failings adding pressure to its capital surplus and have assumed a remaining A$1 billion buyback is cancelled. 'To be critical, you could probably say Macquarie missed opportunities' that rival firms such as KKR and Blackstone generated over the last decade, said Matthew Wilson, an analyst at Jarden Securities, which has an 'underweight' rating on Macquarie. The others 'have grown a lot faster and a lot bigger'. BLOOMBERG
Bloomberg
a day ago
- Business
- Bloomberg
Macquarie ‘Millionaires Factory' Put at Risk by Investor Revolt
Save Macquarie Group Ltd. 's long vaunted money-making machine for top bankers is showing signs of strain. Known as the 'Millionaires' Factory,' the Australian financial giant has for years awarded more generous pay to its senior management and dealmakers than rivals across Asia. Former commodities head Nick O'Kane famously earned more than JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, before he left last year.
The Hindu
3 days ago
- Business
- The Hindu
Dollar rises against major peers after U.S.-EU trade pact
The dollar gained against major currencies, including the euro and yen, on Monday (July 29, 2025), with sentiment lifted by a trade agreement between the U.S. and the EU, which brings market certainty and averts a global trade war. U.S. President Donald Trump and European Commission President Donald Trump reached a framework trade agreement, which provides for an import tariff of 15% on EU goods, half the rate Trump had threatened from August 1. That follows last week's U.S. agreement with Japan, while top U.S. and Chinese economic officials will resume talks in Stockholm on Monday, aiming to extend a truce by three months and keep sharply higher tariffs at bay. The dollar rose against the safe-haven Swiss franc, up 0.82% at 0.80155 francs. It rose against the Japanese yen , up 0.29% at 148.12. The euro was last down 0.81% at $1.164275, set for its biggest daily loss since mid-May, reversing an initial knee-jerk rise in Asia trade as investors' focus shifted to what an easing in global trade tensions meant for the dollar overall. 'While the USD's strength today may reflect the perception that the new US-EU deal is lopsided in favor of the US, the USD's strength may also reflect a feeling that the US is reengaging with the EU and with its major allies,' Thierry Wizman, global FX & rates strategist at Macquarie Group, said in an investor note. 'Rather than the 'divorce' between the U.S. and its partners that was seemingly foretold in February-June, the US and its key partners are instead in 'marriage counselling', and thus still 'talking about their feelings.'' The dollar tumbled sharply earlier this year, particularly against the euro, as fears that dramatically higher tariffs on trade with most of its major partners would hurt the U.S. economy caused investors to consider shifting out of U.S. assets. Normally, the gap between yields on government bonds is a major factor for currency moves, but at present the euro is significantly higher than the gap between U.S. and eurozone yields would imply. 'If you think about what we expected in the beginning of the year, no one really thought that the euro is going to be so strong. We all thought that, especially post Liberation Day, that the dollar will remain strong,' said Anthi Tsouvali, multi-asset strategist at UBS Wealth. 'We continue to see the dollar weakening; it has consolidated recently a little bit but we think that in the long term it will get weaker.' The euro fell against the yen and sterling, having hit a one-year high on the Japanese currency and a two-year high on the pound at the start of trade. The dollar strengthens against the pound, which was 0.24% lower at $1.3422. As concerns subside about the economic fallout from punishing tariffs, investor attention is shifting to corporate earnings and central bank meetings in the United States and Japan in the next few days. Both the Fed and the Bank of Japan are expected to hold rates steady at policy meetings this week, but traders will watch subsequent comments to gauge the timing of the next moves. Investors will also be watching to see Mr. Trump's reaction to the Fed's decision. The U.S. president has been putting the Fed under heavy pressure to make significant rate cuts, and Mr. Trump appeared close to trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. In addition, quarterly results are due in the coming days from Apple, Microsoft, Amazon and Facebook parent Meta Platform, four of the 'Magnificent Seven' whose stocks heavily influence benchmark indexes. They matter for currency investors if strong results cause an acceleration of flows back into U.S. assets.
Business Recorder
3 days ago
- Business
- Business Recorder
Dollar gains against major peers
NEW YORK: The dollar gained against major currencies including the euro and yen on Monday with sentiment lifted by a trade agreement between the US and the EU, which brings market certainty and averts a global trade war. US President Donald Trump and European Commission President Ursula von der Leyen reached a framework trade agreement, which provides for an import tariff of 15% on EU goods, half the rate Trump had threatened from August 1. That follows last week's US agreement with Japan, while top US and Chinese economic officials will resume talks in Stockholm on Monday aiming to extend a truce by three months and keep sharply higher tariffs at bay. The dollar rose against the safe-haven Swiss franc, up 0.82% at 0.80155 francs. It rose against the Japanese yen , up 0.29% at 148.12. The euro was last down 0.81% at $1.164275, set for its biggest daily loss since mid-May, reversing an initial knee-jerk rise in Asia trade as investors' focus shifted to what an easing in global trade tensions meant for the dollar overall. 'While the USD's strength today may reflect the perception that the new US-EU deal is lopsided in favor of the US, the USD's strength may also reflect a feeling that the US is reengaging with the EU and with its major allies,' Thierry Wizman, global FX & rates strategist at Macquarie Group, said in an investor note. 'Rather than the 'divorce' between the US and its partners that was seemingly foretold in February-June, the US and its key partners are instead in 'marriage counseling', and thus still 'talking about their feelings.'' The dollar tumbled sharply earlier this year, particularly against the euro, as fears that dramatically higher tariffs on trade with most of its major partners would hurt the US economy caused investors to consider shifting out of US assets. Normally the gap between yields on government bonds is a major factor for currency moves, but at present the euro is significantly higher than the gap between US and eurozone yields would imply. 'If you think about what we expected in the beginning of the year, no one really thought that the euro is going to be so strong. We all thought that, especially post Liberation Day, that the dollar will remain strong,' said Anthi Tsouvali, multi-asset strategist at UBS Wealth. 'We continue to see the dollar weakening, it has consolidated recently a little bit but we think that in the long term it will get weaker.' The euro fell against the yen and sterling, having hit a one-year high on the Japanese currency and a two-year high on the pound at the start of trade. The dollar strengthens against the pound, which was 0.24% lower at $1.3422. As concerns subside about the economic fallout from punishing tariffs, investor attention is shifting to corporate earnings and central bank meetings in the United States and Japan in the next few days.
CNA
3 days ago
- Business
- CNA
Dollar gains against major peers after US-EU trade pact
NEW YORK/LONDON :The dollar gained against major currencies including the euro and yen on Monday with sentiment lifted by a trade agreement between the U.S. and the EU, which brings market certainty and averts a global trade war. U.S. President Donald Trump and European Commission President Ursula von der Leyen reached a framework trade agreement, which provides for an import tariff of 15 per cent on EU goods, half the rate Trump had threatened from August 1. That follows last week's U.S. agreement with Japan, while top U.S. and Chinese economic officials will resume talks in Stockholm on Monday aiming to extend a truce by three months and keep sharply higher tariffs at bay. The dollar rose against the safe-haven Swiss franc, up 0.82 per cent at 0.80155 francs. It rose against the Japanese yen, up 0.29 per cent at 148.12. The euro was last down 0.81 per cent at $1.164275, set for its biggest daily loss since mid-May, reversing an initial knee-jerk rise in Asia trade as investors' focus shifted to what an easing in global trade tensions meant for the dollar overall. "While the USD's strength today may reflect the perception that the new US-EU deal is lopsided in favor of the US, the USD's strength may also reflect a feeling that the US is reengaging with the EU and with its major allies," Thierry Wizman, global FX & rates strategist at Macquarie Group, said in an investor note. "Rather than the 'divorce' between the US and its partners that was seemingly foretold in February-June, the US and its key partners are instead in 'marriage counseling', and thus still 'talking about their feelings.'" The dollar tumbled sharply earlier this year, particularly against the euro, as fears that dramatically higher tariffs on trade with most of its major partners would hurt the U.S. economy caused investors to consider shifting out of U.S. assets. Normally the gap between yields on government bonds is a major factor for currency moves, but at present the euro is significantly higher than the gap between U.S. and eurozone yields would imply. "If you think about what we expected in the beginning of the year, no one really thought that the euro is going to be so strong. We all thought that, especially post Liberation Day, that the dollar will remain strong," said Anthi Tsouvali, multi-asset strategist at UBS Wealth. "We continue to see the dollar weakening, it has consolidated recently a little bit but we think that in the long term it will get weaker." The euro fell against the yen and sterling, having hit a one-year high on the Japanese currency and a two-year high on the pound at the start of trade. The dollar strengthens against the pound, which was 0.24 per cent lower at $1.3422. As concerns subside about the economic fallout from punishing tariffs, investor attention is shifting to corporate earnings and central bank meetings in the United States and Japan in the next few days. Both the Fed and the Bank of Japan are expected to hold rates steady at policy meetings this week, but traders will watch subsequent comments to gauge the timing of the next moves. Investors will also be watching to see Trump's reaction to the Fed's decision. The U.S. president has been putting the Fed under heavy pressure to make significant rate cuts, and Trump appeared close to trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. In addition, quarterly results are due in coming days from Apple, Microsoft, Amazon and Facebook parent Meta Platforms META.O, four of the "Magnificent Seven" whose stocks heavily influence benchmark indexes.
