Good morning, everyone, and welcome to Macquarie's 2024 operational briefing and third-quarter trading update. Before we begin, this morning I would like to acknowledge the traditional custodians of this land and pay our respects to elders past, present, and emerging. If I could also ask everyone to switch their mobile phones to silent at this point. So today you'll hear from our CEO, Shemara Wikramanayake, followed by Q&A, and then we'll hear from respectively our Asia team, followed by a Q&A session, and then our BFS team, followed by Q&A. So with that, I will hand over to Shemara. Thank you.
Thanks very much, Sam, and welcome everyone. Good morning. As usual, before I go through the third-quarter trading update, I'll just touch on our footprint of businesses. Many of you are very familiar with this, but to those who are newer, we have four operating groups that operate across very diversified business lines, exposed to very diversified underlying themes, where we have deep expertise and we're well positioned for structural growth. That's our banking and financial services business, which is Australia-focused and is a digital customer experience-focused business, and Greg and the team are here in the front row and will be giving you more detail on that soon.
Macquarie Asset Management, our global asset manager in both public investments and private markets, Commodities and Global Markets across financial markets and asset finance as well as commodities, and Macquarie Capital, which provides advisory and capital markets solutions as well as principal investing where we have deep expertise. Now, those four businesses are supported by our four very important central service groups, and that's our Risk Management Group, our Legal and Governance, our Financial Management, and Corporate Operations Group, which throughout time have helped us access capital, manage risks, manage the operating platform, and deliver great service.
So turning then to the trading update for the third quarter, as many of you who are familiar with us know, we had exceptional market conditions last year, particularly in the third quarter, last financial year, in our Commodities and Global Markets business, and we had a very strong year for realisations in our Green Investment Group assets in Macquarie Asset Management. We haven't seen that repeat this year, and as a result, our results are substantially down compared to that very strong year last year for both the year to date and for the third quarter. But importantly, our franchises remain resilient and are demonstrating ongoing organic growth across the businesses and across the regions, and we also have our team from Asia here to talk to you about one of the regional updates as well.
So looking at the two broad groupings, the annuity style and the market-facing, the annuity style businesses were down on the third quarter last year and down substantially on the year to date last year, principally because of what I mentioned in relation to the realizations in the Green Investment Group, where this financial year we're holding those assets for the renewables fund, which is going through its early raising. We also, in the third quarter in BFS, like the rest of the market, experienced margin pressure and also the continued streamlining of our car loan portfolio, but that was offset by volume growth in both our home lending and our business banking.
Then in the market-facing businesses, again, as I've just mentioned, primarily substantially down both for the third quarter and the financial year to date because of the exceptional market conditions we had in Commodities and Global Markets over last year, particularly in the third quarter. In addition to that, we had lower fee income in Macquarie Capital, where market activity in M&A, despite the perceived slowing of interest rate increases, still has not picked up. Confidence has not returned, and activity levels have not returned despite equity markets being up and debt capital markets being active. Offsetting that, we had higher investment income as we grew the private credit book, and we had some investment gains, albeit lower asset realizations in Macquarie Capital. That's a summary of what the financial results were for the third quarter and year to date versus last year.
I'll touch on the four operating groups and the franchises and what we've been seeing, and then make some comments more broadly across the group. But starting with Macquarie Asset Management, and our assets under management were down slightly at the end of the third quarter. The private markets assets were up slightly with fundraising and investing. The public markets were down slightly, and that was because of net flows, money's flowing away from fixed income as we go through the interest rate cycle. We'd had very big flows into fixed income, and also we had market movements picking it up but offset by foreign exchange. I would note, in terms of the growth of the underlying franchise, that we did have, in the worst fundraising year for private markets in 15 years, we closed our seventh in our series, our latest of our European funds.
That was a record raising of over EUR 8 billion and above what we were targeting. So we are seeing, for core strategies from core managers, there's still very good support in what has been a very, very challenging market. And equally, we are launching, as you know, in addition to our core renewables and energy transition strategy, we were targeting about $2 billion for that. We've had a first close of $1.9 billion. So we continue to have good support from investors in growing the franchise, both in our very core infrastructure area, but adjacent areas like the green investments being the big one, but agriculture, private credit, etc.
BFS as well, the franchise continues to grow well, and you'll hear much more on this from the team shortly, but you can see we're up on everything: deposits, home loan portfolio, funds on platform, business banking, and it's really only the car loan portfolio that we're continuing to focus and streamline, and that's been a strategy we've been pursuing. So again, the franchise growing despite a market where margin pressure is increasing. Commodities and Global Markets, as we said, the result is substantially down because we haven't had the exceptional market conditions that we experienced last year, principally in North American gas and power and a little bit of EMEA gas and power.
The year before that, very strong conditions in terms of EMEA gas and power, and so the inventory management and trading income is down, and so is slightly the risk management where our services do increase with volatility. What I would note for that business is we've been guiding that because of the exceptional conditions in FY 2023, we expect the commodities business to be more in line with FY 2022, and you will see from our results in terms of how we're going this year that the income line is in line with FY 2022, which did have exceptional trading gains in there as well from EMEA gas and power. That is offset by increasing costs, and Alex showed, I think, at the second half results that the costs just over that half were up AUD 300 million.
So we're investing heavily in the platform, in technology, regulatory compliance, etc., to give ourselves a very robust platform to position ourselves for the sort of growth that we're seeing and prosecuting on in CGM. The financial markets business continues to grow nicely, and so does the asset finance. So those franchises are continuing to build up, and I'm happy to talk about those in a little bit more detail as we go through questions.
Macquarie Capital, what happened is we had lower fee and commission income. As I said, activity levels are still much lower than they have been. In fact, the lowest in 10 years in terms of volumes and revenues. It's growing. It's over AUD 20 billion, and that's generating very good, stable, repeatable earnings in Macquarie Capital. And then on the investment side, we've had some gains on some of the positions as well in Macquarie Capital.
But all four franchises growing really nicely as they have been. In terms of our human capital, so we're at 20,800 people now. More than half of those are offshore. Now, as I was mentioning in relation to CGM, we've been through a program of heavy investment in tech, in reg. It's reflected in the fact that our headcount, 20,800 at the moment, slightly down from the 21,270, I think it was, Alex, at the half-year, but up a lot from three years ago. So at FY 2021, we had been sitting stably at about 15,000, getting to about 16,000 people, and OPEX of about AUD 9 billion, actually, we were running at until then, pretty stably at AUD 9 billion.
In the three years since then, our headcount has gone from about 16,000 to over 21,000, and our OPEX has gone from AUD 9 billion to AUD 12 billion as we have had to make material investment. Alex has been sharing all the details in tech, in reg. What we're seeing now is some of those programs start to deliver, and we're being able to run off some of those programs. So that is reflecting both in our cost base and in our headcount. So we've seen the headcount, which is still up from where it was at 1 April this year, is coming down from 1 October this year. Last year, sorry. I'm talking this year in terms of financial years. Apologies. In terms of our funding and capital position, still very strong. Our term funding comfortably exceeds our term assets.
The team were able to raise AUD 10.7 billion of term funding over the last quarter, and our customer deposits, as I mentioned earlier, up 3%. I didn't go through the detail, Greg, because you and team will cover that, but at close to AUD 140 billion. In terms of our capital update, we're at AUD 9.7 billion now of surplus capital. That's a slight reduction in our surplus, partly because we've been undertaking the buyback. We've acquired about AUD 236 million of shares so far, but also offset by the net profit after tax, dividend payments, etc. In terms of capital absorption in the business, we're continuing to also deploy capital into the businesses. You can see there, over this most recent quarter, AUD 0.4 billion into each of CGM and Macquarie Capital.
In CGM, that's credit risk capital is where we're absorbing capital, which is driven by the derivative exposures increasing in FX and interest rates. In Macquarie Capital, we continue to deploy, as I said, in credit and also equity. But we remain comfortably above all our key approved [inaudible] three minimums on regulatory ratios. In terms of regulatory update, there's no changes really on this page. It's the same as we had before. But what we do want to update on, as you will have seen this morning, is a management change where Nick O'Kane, after almost 30 years at Macquarie, has decided to step down as head of Commodities and Global Markets from the end of this month to pursue opportunities outside Macquarie. And I really want to thank Nick. It's been an incredible journey. He's made a massive contribution and impact.
Part of that has been building an awesome team around the world, mostly through the commodities business, but also more recently across the whole of CGM. I think he has said that it is the depth and capability of that team and how they're positioned as well that gives him comfort to take this step, which he has told the team he's doing for a range of personal reasons. Happily, Simon Wright, who's with us here in the front row and, as we've overlapped for 35 years, Simon, even though you still look 32, is here and is stepping up as the group head of CGM. Simon is highly respected across the whole group.
He's most recently been leading financial markets but has been here since the early days of Andrew Downe when we had two men and a Labrador in that business and will oversee the transition to the next phase for CGM. So we're very pleased to have Simon here with us. So the last thing I want to finish on is just talking about the outlook for the short term, and then the medium term we'll touch on as well. But in terms of the short term, as we have been saying, in Macquarie Asset Management, looking at it by each group, we expect the base fees to be broadly in line.
But in terms of the net other operating income, subject to market conditions and completion of transactions, we expect this number for the second half of this financial year to be substantially down on the second half of last financial year. And I've been talking through the sort of reasons there with the green investments. Banking group in BFS, as we've guided previously, we're seeing growth, as I've shown, across loan volumes, deposits, funds on platform. That is obviously impacted by market dynamics and what's going on with margins. And we're continuing to invest in the platform, in technology, in compliance, in growth of the offering to customers, and we'll continue to monitor our provisioning in that business. Macquarie Capital, as I've been saying, transaction activity in this financial year is expected to be slightly down on last financial year.
In the investment-related income area, we're expecting the income in the second half to be significantly up on the first half. That's partly the revenue that we're seeing from the private credit portfolio and a small number of investment gains as well, partially offset by the timing of our asset realizations. As we've guided for commodities and global markets, as we said and I've been saying today, we had the benefit of these exceptionally strong trading conditions in the last financial year. In terms of guidance for this financial year, we're saying that we expect the income to be broadly in line with the prior year, FY 2022, which is what we're actually seeing, and we're expecting consistent contribution from both financial markets and the asset finance business. Compensation ratio and tax rate we're expecting to be broadly in line with historical levels.
This outlook, of course, is subject to market conditions, including geopolitical events, completion of period-end reviews and transactions, the composition of income including FX, and potential tax or regulatory uncertainties. Given that, we maintain our cautious stance and conservative approach to capital, to funding, to liquidity, to position us well through this and any environment. Over the medium term, as we've said and as I said at the beginning, we think with our four diversified businesses, we remain well-positioned with good structural growth in all of them: customer-focused digital bank, the private and public markets, the commodities and global markets, and our Macquarie Capital Advice, capital solutions, and investment business supported by ongoing strong technology platform, our risk management, our legal and governance skills included in that, and where we sit in terms of our conservative funding and capital.
So with that, I will hand back to Sam now to take your questions.
Th anks. Great. Thanks, Shemara. So we'll start with questions in the room, and then we'll go to the lines. Andrew?
Thank you. It's working?
Is it on?
[Inaudible]
Thank you, Sam. Andrew Triggs from J.P. Morgan. Just interested in the short-term outlook statement with regard to both Macquarie Asset Management and Macquarie Capital. Obviously, we're seeing a continued pushback in expectations on timing of asset realizations. Can you make some comments on the drivers of that? You've also said in the past there's been a gap between expectations between buyers and sellers that's affecting those realizations. So keen to hear any thoughts on those issues. And then also with respect to green investments, specifically how advanced are the sale processes and how much visibility do you have on Q4?
Yeah. Well, I mean, I guess the broad point is, as I said, that M&A activity is the lowest it's been in 10 years. I think that's partly been driven by confidence is taking a while to come back with buyers and sellers. But it's also, as you know, less money is being returned out of private equity funds, so people have less liquidity but caution as well. So we are finding in sales processes where previously you'd have had five buyers, there may be two. In addition to that, well, I mean, for us, because we're very well-funded and capitalized, we're having to make a call in these processes. Do we actually want to take today's prices, or should we defer some of these processes?
We're being pretty disciplined about that because if we think there is real gain from holding, then we will continue to devote the balance sheet to it. But if not, we're just clearing out the assets and moving on and deploying our capital in what we think could be better places as we go through this environment. We have had a small level of impact as well from regulatory approvals. So we've needed, in terms of assets we're transferring to the renewable fund, etc., a bunch of approvals that are taking a little bit longer. And so that could have some timing impact on the transfer of those assets.
But I think that's been the main contributor. We've had some positions where we've had investment gains without realisations, things like listed positions that have gone up because equity markets have come up. We've also had some third-party investment into assets where we've revalued things. Anything to add, Alex?
Oh, no. It probably covers it. I mean, the only thing I'd add, Andrew, is just I mean, obviously, the interest-rate environment has changed, but it's changed relatively quickly. And one of the things that we talked about, obviously, at the half-year result was the need to see stability in rates and then need to see transactions pick up. I think what's really happening is that stability seems to be more evident today.
But as Shemara just said, the transaction activity is still relatively low, so you're still seeing people adjust to that new environment. You'd expect over time, obviously, vendors' expectations are going to have to come down a bit. Purchasers are going to have to come up a bit to actually enable those transactions to happen. And that's still working its way through. I suspect it'll play out over the next, I don't know, six to 12 months as people get used to a different environment.
Alex, just to follow up on Shemara's point around those investment sale gains effectively mark up of existing assets. Is that a departure from historic treatment of those assets given that Macquarie seems to be pretty conservative with accounting of?
No. I mean, some of the positions on the balance sheet have to be fair valued through P&L. Where you've got an interest that's lower than the equity accounted threshold, you've got a fair value through P&L. So some of the gains that Shemara just talked about, obviously, are positions that we've got in listed securities where we have a lower amount than that equity threshold. And we're just remarking those.
Our accounting standards are exactly the same. There's also been situations where we've written off intangible or expensed intangible. We have converted some capitalized cost to DevEx over this quarter because of the application of the accounting standards that we work closely with the auditor on as well. Same accounting standards and approach.
Great. Let's turn to John. Thanks.
Thank you, John Mott from Barrenjoey. A question, actually, on the commodities short-term update as well. It's actually quite a decent number. If you look at the environment, you've had very low volatility, prices falling, and pretty warm weather through North America apart from one cold week. It's been very warm. So to actually hit the numbers, it looks like it's a pretty good effort. So I wanted to get a feel on how you've actually managed to do that. You've either won market share, and I think when we were over in the U.S. back in March last year, you talked about roughly 10% market share in gas marketing. Have you won market share, or are you taking risk that's actually worked? So first of all, I just wanted to get a feel for how you've actually achieved a very strong number despite pretty difficult market conditions.
Yeah. And look, I'll answer that first. And then we have a couple of people here from CGM who may want to comment. But as you say, John, and it's good you're picking up on it, the income line, the revenue line, basically is tracking FY 2022 where we had exceptional EMEA, gas, and power revenue in inventory management and trading. What's happening now is the underlying areas, the financing, the risk management, the transportation, the storage, those revenues, which are more franchise, ongoing underlying annuity income, have picked up because we have managed to grow not just share in the areas in which we've been in but into adjacent areas. That business is super diversified in commodities. And for example, this year, Dan Vizel, who everyone would have seen in Houston, is here to present on Asia.
But the oil and ags business that Dan heads up is contributing very strongly while gas and power has contributed less compared to historically because we've had less weather events, more storage, etc., and more stability. So it's growing underlying multiple franchises in geographies as well as sectors that is lifting up the ongoing underlying earnings. It's this year a better quality earnings figure than FY 2022. Now, the OPEX has gone up as well, which has impacted the net figure relative to FY 2022. And the other point I'd make is we're still small in CGM. The runway for growth is huge. So gas and power was huge in North America. We've managed to transition into EMEA. We've got teams now growing in Asia. That's a market for us to grow into. So as I said, it's a franchise growth. You had a follow-up question?
Yeah. It'd be just great to get some more disclosure at the full year, if possible, on these exact points so we can actually get risk management inventory. To actually be able to model that and get a good feeling on how well that franchise is doing, it'd just be great to get some more disclosure, if possible, at the full year. But also a follow-up question. We've talked a lot about the change that every investment bank of the world's hopefully well, are commenting on, especially since the Fed pivoted. You're starting to see the pipeline improve, companies talking a lot, a lot more balance sheet getting deployed. And obviously, there's this timing difference even when companies start talking about it to announcing a transaction to it's settling is three, six, up to 12 months.
Does this give you much more confidence at FY 2025 that, as you're saying, you're not doing deals now? You've got six weeks left to the end of the year. But FY 2025, you've got a lot more confidence in how that's looking?
Yeah. Look, I'm cautious about guiding because ordinarily, when we've looked at how markets pick back up, when rates stabilize and confidence comes back, it's been a bit sooner than this. We've been going since the last quarter of last year, and activity levels are still quite becalmed. At some point, that has to come back. There's huge liquidity and dry powder out there. We're sitting on AUD 35 billion-plus. It's the largest we've ever had. I think markets need to adjust a bit on pricing, but confidence needs to come back as well. We're seeing a lot of private credit transactions happen, a lot of debt capital markets, but at equity levels, not. In theory, it should come back, which will affect both the MacCap investment realization figures as well as the Macquarie Asset Management ones on performance fees as well as realizations.
Basically, we respond to each environment as we see it. This for us remains a very good investing environment. If anything, we're having to be disciplined about where we put that capital because there are a lot of opportunities coming. Certainly, what will happen in commercial real estate will have knock-on impacts. We're thinking hard about where to invest now from our medium-term perspective. Realizations, in theory, they should pick up, but calling the markets is hard. We just respond to them as we see them, I think.
Oh, no. I think it covers it. I mean, one thing I'd say, at a half-year result, John, we talked about the pipeline. I mean, obviously, the pipeline of activity is strong. And that's a reflection, I suppose, of some of the pent-up demand in response to the points that Shemara just made. But generally speaking, you want your investment banking team to be optimistic, John. So the conversion of optimism to transactions is history tells us it takes a while to get things done. And so I think that issue we've talked about around the gap between buyers and sellers and confidence coming back to actually bridge that gap is an important part of actually getting things done.
And then there's a whole range of other things that affect the business through the year that I think people are talking about as well around the political environment, the geopolitical environment, a range of things that always tempt your enthusiasm to the conversion rate.
Thank you.
We've got Ed in the second row there. And then I'll come to you, Matt.
Thank you. It's Ed Henning from CLSA. Just two follow-ups from the first two questions. Just on the regulatory approval rolling through for the renewable assets, how confident are you that they're going to fall in the fourth quarter? Is there a real risk that it gets pushed till next year as a first one?
We've at the end of this quarter realistically taken into account the likelihood of those approvals coming through. There are a couple of them we think will probably fall into the beginning of the next financial year. As we are looking at this year's result and guiding for the short term, we've taken that into account.
Okay. No, that's good. Thank you. And then just further on the commodity side, you talked then about, I guess, the quality of the profit coming through. So in talking about that, has there been any big one-off gains so far this year? Obviously, you had a couple of really cold days in the U.S., or has it really been a little bit more smooth sailing as in everything kind of growing, the franchise getting bigger, which you talked about? And therefore, if you think about what you've said before, the 2022 being the base year, can you see that continuing to grow in 2025, 2026 on a steady state kind of growth rate? And then you'll see potentially a little bit up and downs where you get a bit more of profit coming through.
Yeah. I think what you've just said is what we should be expecting. So this year, yes, we had a small bit of cold weather in North America, but that didn't persist. And frankly, storage is very strong at the moment in gas and power in Europe and in North America. So we hadn't expected the volatility. And there really haven't been big inventory management and trading gains this year compared to if you look at the history, we've had years where we've had spikes in that. This has not been one of those. The other thing I don't want to dismiss is the contribution from the financial markets and the asset finance. So Simon, in the time Nick's been Group head, the revenue lines in FIC have doubled. And that is underlying growth. There isn't a lot of trading in there.
I don't know, Simon, if you want to comment further on that. But that's also a strong bit of we can grab that mic.
Thanks, Shemara. Look, yeah, with the financial markets business, it's basically based on a strategy of client franchise. So yep, we are victims and prosecutors of volatility, but ultimately, we build the business around clients and about solutions, those clients. And so the nice thing that we've got is we've still got an open runway globally. And we've been prosecuting that strategy and just building it out in region by product. As a result, we've seen incremental growth. It's been a steady state of growth over the last five years.
Yeah. So consistent with commodities. And that is also 30% of what CGM delivers.
Okay. Matt, you've got a mic. Yep.
Thank you very much. Matt Dunger from Bank of America. Just if I could ask a question on private credit, and you've exceeded your expectations for growth here and deploying extra capital, can you talk to us about where this growth is coming from? Is it the traditional real estate, infrastructure, energy-focused sectors?
Yeah. Look, in private credit, we have a portion of it being real estate, but the bulk of it is industrial companies that are typically safer, higher cash flow, senior-secured lending. And there'll be sort of business services, software and services, those sorts of sectors that we invest in. I've got Andrew Cassidy nodding here because he's our chief risk operator that started his life in that business. But that book, going back to the Ben Brazil days, has grown very patiently, organically, adjacently. And we have teams now with very deep expertise in North America and Europe principally, but also here, Australia, Asia. And they'll have sub-channels. For example, insurance brokers in the US is a channel that we know really, really well and have been lending to for a long time.
I think, Alex, we shared that we run an expected credit loss provisioning there of 3%-4%. And our experience is 0.3%-0.4% over a very long time. So it's deep sector expertise in underlyings where we work a lot with sponsors as well that we know well, that we've been able to get invested. It's getting to be a much tougher investing environment because there are a lot of private credit funds out there looking to invest. We have had some offer to buy a whole book at a premium, but it's a core business that we really like doing on balance sheet. We find the return on capital very good. We're growing it very patiently. We've had co-investors come in alongside us now wanting to invest. We're being very disciplined about deploying in the current environment. But I think unless you have anything to add.
Right. So it's more organic rather than distressed opportunities at this point?
No. It's not a distressed one.
Yeah. Not saying much distress. And obviously, if there was distress, we'd be happy to step into it. But we're not really saying much distress, which is consistent with what we're saying across credit markets more generally, I mean, as you know. I mean, as Shemara said, you think of companies that do $75 million-125 million worth of EBITDA, strong cash flow generation, typically good sponsor, senior-secured financing, pretty diverse. About 40% of it's in Europe, half of it's in the US, a little bit here in Australia. I mean, it's a good pipeline of activity. It's a bit correlated with activity levels more generally. So if you look at the first half, we added AUD 1.5 billion to the book in the first half, and we added AUD 1.5 billion in the third quarter.
So you can see to the point that we're making before, you are starting to see some evidence that the transaction activity is starting to pick up, sponsors starting to get a bit more active, but it's still relatively slow. And we're pretty cautious about how we grow the book because that annuity income coming through there, we think, is obviously very valuable from a group of people.
The two other things I'd say briefly is that a lot of these are more bespoke where it's not tended out to a lot of people. Relationship's important. Macquarie Capital's also helping from the advisory side there in relationships with sponsors in growing the pool of origination.
Thank you very much. Just a final question, if I could, on anything you can say around the compensation ratio. Obviously, your guidance here in line with historical levels could be interpreted in a number of ways. What's the right historical level? Is it the last five years, the last 15 years?
Yeah. I mean, the net amount for the group varies with who's delivering the earnings. But basically, we benchmark to where the market compensation is in each of the business lines we're in and have understandings with all of the teams that they share a certain percent relative to what's going on in the industry, the returns on capital they deliver, etc. We very much take a view that it's in shareholder interest to hang on to talent. We're a human capital business.
And so to be paying market rates but at the lower end of market rates, sorry, staff, but trying to maintain the talent, which is what drives the alpha, while still delivering good returns to shareholders. If the market rates in some particular line of business get to a point where the ROEs are not good for shareholders, then we just have to pivot our businesses away. That's more the step we take than cutting comp and driving the talent away.
Great. We've got two, sorry. Yeah. We've got two questions on the line, so we might go to the lines and then come back to the room.
Your first question comes from Andrei Stadnik with Morgan Stanley. Please go ahead.
Thanks, Andrei. Can't hear Andrei.
Andrei, you might have your cell phone mute. Your next question comes from Brendan Sproules with Citi. Please go ahead.
Hi. Good morning. I just have a quick question on the outlook at CGM. You did say that it was tracking in line with the FY 2022 year. You also made the comment that in that year, there was some really good performance out of the gas and power trading in the EMEA region. I was just wondering, what sort of fourth quarter are we cycling here? From memory, there was quite a jump in the Dutch gas price in February, I think, with the onset of the Russia-Ukraine war. Is that the type of thing that we're cycling that we think we can cycle again in terms of total revenue for this fourth quarter?
Yeah. I think, Brendan, basically, what we're saying is that first quarter, second quarter, third quarter, fourth quarter this year are just delivering consistently. So if you take the first half and compare it to the income in FY 2022, it was consistent. And that's happening with the second half as well without anything like what you just referred to in terms of what was going on with the Russian invasion of Ukraine in our FY 2022. So we're not having any of that heightened volatility, but we're still tracking at the same income levels because the franchise has just grown, the client base has grown, the sectors we're in have grown. So the underlying revenues have grown.
Maybe I'll share if I could just one thing. So if you look, Brendan, back at the 2022 result, you'll see commodities income was about AUD 3.3 billion. About two-thirds of that came from Factory Risk Management. A third came from inventory management and trading, which we've said before is the more challenging part of the business to forecast. So when we came out and we looked at 2023 and said that had the benefit of exceptional conditions, so we referenced back to 2022, obviously, what we're really saying there is that we think the client franchise, to the point that Simon was making before about the growth of client franchise, not just in commodities but across the whole of CGM, is giving us confidence to, I guess, give you a forecast that includes better contribution from client activity through the 12 months to March 2024.
So that's really what we're saying. And I think to the question that was earlier asked, we're not really taking any more market risk. But what has happened, we've built out the capabilities we had in North American gas and power into the European gas and power business, for the sake of the example. Or we're burning it out into Asia. And Dan Vizel will talk about it. The underlying client franchise, we're dealing with more clients in more jurisdictions. We're dealing with them more often. And that's what's driving the franchise growth in CGM. Obviously, what CGM tries to do is position itself for low-cost optionality. And in environments where there's volatility, you'll see that low-cost optionality pay off. In this year, it's been a relatively more benign environment. The client franchise is doing what we expected to do, which is deliver consistently through time.
That's helpful. Thank you.
I forgot Andrei. I think the question comes from Andrei. Morgan Stanley, please go ahead.
Yeah. Can you hear me okay?
Yeah.
Okay. Thanks. I apologize about earlier. Can I ask two questions? Firstly, just around the outlook for renewable energy, I think we've seen quite a change in tone from the U.K. government in particular around the purchase agreements for the next round of bids. Just what are you seeing in terms of some of the developments and the government commitments to renewable energy around the world?
Yeah. Andrei, we talked about this at length at the last half-year result and kept people for quite a while answering this. But at the time, if you recall, you were asking specifically about the U.K. renewable. We'd had an auction at GBP 44 where they hadn't had interest. And we were saying the cost had gone up about 40%. They probably needed to move to the GBP 60 to attract interest. And it was worth doing that because the wholesale price is at 80. They ran the next auction in the 1970s. So that response happened. The same happened in the U.S. where we'd had a couple of people walk away from projects at 80%-90%. We had just been awarded one in the 140s. We've just been awarded another one in the New Jersey region at substantially above that 140.
I don't think the price has been disclosed, but well above. So I think to your broader question, governments are very committed to the renewable journey. I think we mentioned last time that the U.K. had a commitment to put on another 30 GW of offshore wind by 2030. So did the U.S. And they are sticking to that with the prices they're giving for PPAs. It doesn't mean that there aren't factors that affect the market. And this is always the case. And we have to be nimble and keep responding. So in the wind sector, the turbine manufacturers are going through a lot of ructions. Siemens, GE are making all sorts of announcements about what they're doing. And offshore wind is a sector where there is volatility.
And we have to be disciplined about where we go in that sector and the PPAs we have that we build projects to. Other sectors, I think the increase in interest rates generally where we'd had people bidding down the required returns on mature renewable assets is causing a bit of pause. But then there are new sectors where a whole lot of capital is needed. So firming in the energy area for batteries, long-haul transportation. We're doing a lot in e-methanol for shipping, sustainable aviation fuel for aircraft. Hydrogen, obviously, is one of the big firming solutions in energy, agriculture. So I think the renewable transition continues. And the governments are showing big commitment to it. The markets have a little bit more caution in terms of where they go. We said we've had really good interest in our energy transition fund, which is targeting slightly higher returns.
There'd been a lot of money flowing into core renewable funds. We're in the process of raising ours. I would say that generally, we're seeing less interest in the core, not just renewable but private equity, everything the lower returning as rates go up. But hopefully, as we had success with our European infra fund with the great track record we have of a couple of decades of renewable investing, we'll see reasonable interest. But as with everything, we'll be disciplined. We'll monitor and decide what we're doing in investments, realizations, fundraising, etc. As we're in a space that's evolving.
Thank you, Shemara. My second question, can I ask around costs? What is your attitude on cost management for the next six to 12 months? In particular, I know in the staff numbers, we're down about 2% during the September quarter, sorry, during the December quarter.
Yeah. Look, basically, for us, it's return on investment. I mean, it's super important for us as we support all these franchises we talked about in growing that we have a robust, disciplined platform. And that's not just tech investing, but we're a regulated bank supporting a lot of these businesses. And we want to make sure, not just with APRA here but the PRA, CBI, that we are well ahead of what regulators want in terms of giving us license to operate. So we're making the investments. But we are trying to really be focused in terms of discipline and return on that investment. And as I said, we're seeing some of the programs mature. So our headcount has come off a bit. If we look at our global peers, they're cutting headcount and cost quite dramatically. I had the numbers here. I can pull them out.
But they've all announced 10% here. They tend to be very top-down. We're taking people out. Happily, given we're earning really good return on our businesses, they have organic growth in the franchise. We have good capital and funding. We are continuing to take our disciplined approach of still investing where we need. And you'll have Greg and the team talk soon about BFS. We're trying to build out Greg's business banking even more. We want to invest there in the customer experience, in the wealth platform. We think we can do more with technology. Ben will talk about the home lending. And we've got Richard here talking about what we're doing in BFS in technology. We're still investing. But we are seeing programs come off. And so headcount is off 2%.
We probably will see costs continue to come off a bit, Alex, as these programs continue to deliver and run off. That was what was expected. But we don't have a top-down like a lot of our peers, X% out, this many headcount have to go. We tend to run pretty leanly all the time and be disciplined about investing for returns, so.
Thank you.
Okay. If there's no further questions, we'll wrap up the Q3 section then. I'll ask Shemara and Alex to exit the stage.
Awesome. We'll let everyone present. Dan Vizel is arbitraging ops briefings and moving to wherever the next topic is. So you'll probably see him next year as well.
We might just get the front table refreshed if that's okay. I'll then ask our Asia team, Verena Lim, Dan Vizel, Adam Zaki, and Ivan Varughese to come up. We'll play a short video, which is showing our clients and staff in the region.
Asia-Pacific is hardly homogeneous. Each country has a very nuanced character, if you will. So it's very hard to win in this region if you don't have local expertise or local knowledge.
[Foreign Language]
FMG Gurugram is a team of 800 people. We play a very important role in FMG delivering its global strategy. It's a diverse team of talented people. We have chartered accountants, regulatory experts, as well as data experts.
From our perspective, global collaboration is a really important source of differentiation for us. We are absolutely focused on that as a global team. The regional team in Asia plays its part in that regard, focused on the areas where we believe we've got genuine differentiation and global capability.
We ensure that we deliver seamless services and digital experiences across the enterprise. We provide technology solutions to the business to make sure that they're ready to realize opportunities and make sure that we are using the latest technology to realize those opportunities.
So when we were looking for partners who would be able to come and invest in our firm and really work alongside with us, we were looking for firms that would bring a tremendous amount of global experience in the digital infrastructure space. Plus, we were looking for a team that would really be hands-on. And I think Macquarie really has the perfect combination of the two. We saw that they had the experience with the team that actually had done deals of this sort in the past. Plus, they had a team on the ground who was willing to really work alongside with us, partner with us, and get in the trenches deep with us to help this business grow.
[Foreign Language]
[Foreign Language] Macquarie [Foreign language].
Our team in Asia has been empowered and equipped to present a holistic Macquarie to their clients, showcasing cross-asset offerings to clients who are looking for a long-term partnership. By deep diving into our clients' businesses and portfolios, we can better articulate to our internal stakeholders in terms of calculated risk and at the same time deliver efficient and effective solutions to our clients. This creates stickiness, builds trust, and the resultant is we have a buildup of strong and long-term partnerships.
[Foreign Language]
We collaborate with the business to ensure that the technology applications and systems we develop are robust, resilient, and sustainable. Innovation is key, being able to leverage digital solutions in the market and looking at how we can apply those to how we do business.
What excites me is that we're operating in a global team. We're on the cutting edge of what's next for our clients.
By having Macquarie's brand onboard and as a majority shareholder, the amount of credibility that our customers have in our ability to continue to invest in infrastructure, to deliver on their network requirements, and to be able to scale up not only for the next one or two years but for the next decade has really been amplified.
[Foreign Language]
We see a significant opportunity to evolve the way we support high-net-worth client channels. High-net-worth population in Asia-Pacific is expected to expand the highest growth in the world and larger than North America by 2027. We also see significant opportunity in family office space, especially in Singapore.
One thing I really enjoy about my work at Macquarie is the complexity of the work and the empowerment I have to come up with new ideas and own the delivery of what I do.
We empower people by not telling them what to do. The Asian workplace is used to a top-down culture. But Macquarie continues to provide a platform where people can actually feel comfortable to speak up and enjoy that.
Knowing each other's strengths and using that to get to an optimal outcome for the group is really essential. Having that trust and teamwork is actually the foundation of a high-performing team. That's why I really love working for the group.
Good morning, everyone. It's my pleasure to update you on Macquarie's operation in Asia today as Macquarie's CEO for the region. Last time we profiled Asia was in 2019 when my predecessor, Ben Way, talked about the importance of our local and diverse teams driving growth for the wider Macquarie group. This still remains core to our success. Our teams on the ground generate the ideas. They deploy the capital that connects our clients to global opportunities. We have a long history of success in Asia. We're continuing to build local offerings to realize opportunities in markets that are aligned with our strengths. Just in terms of my background, I've spent close to two decades with Macquarie in Asia, having moved to the region not long after joining the company as a graduate. Asia is becoming more important to this constantly changing world than ever before.
I feel very privileged to be part of this exciting journey as we continue to adapt to the dynamic environment and capture its considerable opportunities. As you know, Asia is not homogeneous. It's a large, diverse, and growing region made up of different markets, cultures, and in varying economic stages of development. Hence, each market requires a customized approach. We are expecting this region to continue to fuel global growth underpinned by favorable demographics, which is giving rise to significant energy consumption, digital adoption, and urbanization. With these strong tailwinds, we believe there are many opportunities and long-term growth drivers that are aligned to Macquarie's expertise. You'll hear more later from others about how we are doing this across the business groups in Asia. As you can see on this slide, Asia has contributed consistently to the overall group's earnings during the past decade.
With Asia's growing capital pools and wealth, our region has played an outsized role in enabling the group's global growth, contributing almost 30% of overall funding raised. Last month, our seventh European Infrastructure Fund raised more than EUR 8 billion, making it the largest European fund in infrastructure. Almost half of that capital actually came from Asia-based investors, many of whom have been investing with us for many years, which is a testament to our longstanding relationships with our clients. We believe these strong market fundamentals in Asia will continue and present further opportunities to connect Asian capital to global opportunities. In terms of our footprint, this year marks our 30th anniversary in the region. We first established small offices in Hong Kong and Beijing in 1994, mainly to bring Macquarie's equities expertise to the Hong Kong Stock Exchange and to really advise property developers in China on residential developments.
Today, we have over 4,000 staff in 11 markets with two major shared service centres in Manila and Gurugram, where we are delivering critical services to power our global operations. Our growth has been driven by our diverse teams that reflect the communities in which we operate, with people from 28 nationalities speaking 37 different languages. The diversity and complexity of the region is one of the most challenging aspects. So it's important to identify and assess opportunities through a strong local lens. And hence, we have a long history of building and retaining local talent. This local presence has led to our strong track record in Korea, Southeast Asia, India, Japan, and Greater China. As one of the clients mentioned in the video, we understand there isn't a one-size-fits-all approach to these markets.
So it's important that we continue to cross-collaborate not only across Asia but also across globally to provide bespoke solutions to our clients and stakeholders. Let me continue on our 30 years of growth in Asia and how we innovate to meet the evolving needs for our clients, communities, our shareholders, and our people. Our first decade in the region was characterized by patient growth into adjacent markets and sectors, opening new offices, identifying talent, and establishing partnerships. We launched our first Korean Infrastructure Fund in 2002 and have really grown our infrastructure business there over the last two decades. And I'll talk more about this when we talk about MAM. We acquired the ING Asian Equities business in 2004. And over the years, we've built a strong track record across North Asia.
We recently moved into a new office in Japan and have expanded our team there to increase M&A capability as Japan sees resurgence in both inbound and outbound deal flow. For MACAP, we also see a lot of opportunities in emerging economies such as Indonesia and India, where we are really able to leverage our expertise in critical minerals, energy, and technology. For CGM, you can see that we've expanded our offerings over time, globalizing strengths in other regions and then importing them into Asia, from providing solutions to clients with exposure in energy markets, agriculture, physical oil, and metals, and establishing an Asia FX trading hub in Singapore. Dan will talk about CGM in Asia shortly with a deep dive into our Japan power business.
So you may recall at our 2019 operational briefing, we talked about our growth opportunities and showed how we were going to harness the local presence and expertise to grow our franchise. Since then, we've invested in new green investment platforms like Blueleaf and Corio. We've expanded our global exchange coverage to provide access to international futures products on domestic exchanges in China. We've seen an increase in transactions for both MAM and MacCap in emerging markets, including the Philippines and India. And most recently, MAM invested into digital infrastructure in Indonesia through Bersama Digital. We also continue to invest in our own capabilities in the region with key hires to complement our global sector expertise. Shared service centers in Asia are key to our global operations. With deep technical expertise, they position us to be resilient, responsive, and agile by delivering seamless services and digital experiences.
Our teams also enhance our controls and frameworks, allowing us to reduce risk and work efficiently. Like other offices and teams at Macquarie, our people are key to our success. They come from very diverse backgrounds. They're empowered to work together, to pursue innovative ideas, and to challenge what's possible, as evidenced by the evolution from covering high-volume manual tasks to driving automation across the group. They also promote a strong culture and foster an equitable and inclusive workplace with active local employee network groups in neurodiversity, family, pride, and wellness. Supporting our people in their engagement with local community has long been at the heart of everything we do. In FY 2023, we supported 385 community organizations and contributed to 82 nonprofit organizations in Asia. We believe it's important that we give back and support the communities in which we live and work.
So on that note, I'm going to hand it over to Dan Vizel for CGM.
Thank you, Verena. Hi, everyone. I'm Daniel Vizel. I'm head of CGM Asia and also head of our global agriculture and oil businesses. I've only been head of CGM Asia for 18 months now, having moved from the US in 2022 after spending 15 years in the energy business there, both in Houston and New York and prior to that, actually, in London as well. Actually, this is my second stint in Asia. I started my career at Macquarie 27 years ago on the foreign exchange desk in Sydney and then moved to Korea to run interest rates and a bond business. It's great to come full circle. As Shemara mentioned, I keep changing jobs so I can do these operational briefings.
And it's great to be back in Asia as head of CGM, being able to work closely with Simon in the financial markets business alongside with my commodities responsibilities. So in last year's briefing, I was able to present on our oils business and the American Investors Tour. And today, I'll tell you a bit more about our broader CGM business in Asia. Now, as Nick's taken you through on previous occasions and as Shemara mentioned for some of the questions this morning, CGM is a diversified, client-led business with a strong financial sorry, with a strong franchise that we've built over 40 years, providing capital and financing, risk management, market access, and physical execution and logistics solutions to our clients. We provide these across our three business lines: commodities, financial markets, and asset finance.
We've been active in Asia for nearly 30 of those 40 years, supporting our clients and evolving our business through patient, adjacent growth with a continued focus on risk management. Our operating income in Asia accounts for about 10%-15% of CGM's global operating income. While it's not the largest contributing region, it plays a pivotal role in connecting our clients in-region to other global markets as well as our global clients to Asia. While Singapore acts as the regional hub for many of our businesses - and that's where I'm based - we have a diverse team of around 400 staff in 14 locations throughout Asia. By being part of a global business, our staff are also able to collaborate with CGM's global teams, enhancing our regional product and service to our clients. As mentioned earlier, our offering spans three business lines in Asia.
Commodities: our business covers a range of markets including metals, plastics and packaging, natural gas, power, oil, refined products, as well as agricultural and bulk commodities. We support clients operating in Asia or seeking access to Asian markets by leveraging our local and global teams of experts across engineering, geology, meteorology, and fundamental analysis. We've seen steady growth in recent years on our risk management offering as a result of our expansion across products and markets, along with increased activity as we've supported our clients navigate recent market volatility. Our commodity financing activity also has continued to grow. Last year, we provided almost $10 billion in financing across the commodity supply chain. In addition to this, we're also seeing a number of immediate and medium-term opportunities centered around the energy transition.
With global demand for alternative fuel sources rising, Asia will play a key role as a global supplier of biofuels. We're already starting to see opportunities in this space. In 2022, our Asia team supported our EMEA team to finance the delivery of biofuel cargoes from Asia to Europe. Those were our first deals in that space. During that year, we also provided equity and debt investment in a biofuel supply business in China to deliver critical feedstock to biofuel refineries. As you can see, a lot of activity across the commodities business with a number of opportunities emerging within-region. Turning to our financial markets business, we have a strong presence in Asia, providing solutions to corporate and institutional clients with exposure to fixed income, currencies, futures, and credit markets.
You may recall that Simon Wright talked about the fixed income and currencies or FIC opportunity in Japan when he presented at this operational briefing in 2020. We now have a well-established FX and interest rates presence in Singapore and Japan, with a business generating more than 20% of fixed global income. Our futures business connects clients to 12 exchanges across Asia and is recognised as a top commodities general clearing member on the SGX, issuing of warrants in Asia, with offerings in Hong Kong, Singapore, Malaysia, and Thailand. As we respond to the changing markets around us, we're constantly adapting our financial markets business offerings. A great example of this is our digital trading platform, Macquarie Aurora, which many of you may be familiar with. This was a global platform we launched in 2020, enabling our clients real-time access to Macquarie's over-the-counter foreign exchange and precious metals products.
The platform allowed us not only to service our existing clients more efficiently but also provide us access to a whole new set of clients, which has been great for the diversification and growth of our client base overall. Across Asia itself, the platform has seen steady growth, with local FX volume now exceeding AUD 1 billion a day. The platform's success in what is one of the world's most competitive and commoditized markets has been particularly impressive to me. Being part of the commodities business, we started to explore how we could replicate this across other parts of CGM. In response, last year, we saw the opportunity to bring the two divisions together and to create a single CGM e-markets team focused on delivering a cohesive, multi-product platform for our clients across a broad range of assets.
While it's still early days, the team is already working on expanding our product offering, including bulk commodities and agricultural swaps in the near term. And I'm super excited to see where this goes in the future. Finally, moving to our Asset Finance business, which provides tailored leasing and capital solutions alongside asset management services. With over 20 years of experience in the global advanced technology sector, our team is actively providing solutions to longstanding clients in Asia. An example of this is across the semiconductor industry, where record demand has been placed on manufacturers as more and more chips are now featuring in everyday products. While the chip components themselves are very small, the machines used to make them are very big and hence very capital-intensive.
Manufacturers are increasingly looking to businesses like ours who have the financial structuring expertise along with a strong technical understanding of the market to support their growth. Our team has actively been supporting these businesses, having provided more than $600 million in semiconductor equipment financing across Asia since 2021. So as you can see, there is a strong momentum across all of our three business lines in Asia in niches where we have differentiated expertise and with many exciting opportunities underway. I'd like to finish now with a spotlight on our Japan power business, which is a great example of how we've grown through adjacencies and responded as markets and clients' needs have evolved. With established power, gas, and emissions businesses in North America, EMEA, and Australia, CGM had long been interested in opportunities to grow our power business in Asia.
Japan presented a significant opportunity with total electricity consumption nearly four times that of Australia. Japan also relies heavily on the importation of energy products, including oil, gas, and coal, which presented an opportunity for us to provide our full cross-commodity offering to our clients as well as foreign exchange. The full liberalization of the Japanese electricity market in 2016 and the listing of futures contracts in 2019 indicated the market was maturing, creating an opportunity for us to establish a presence alongside our existing FIC business. However, we knew we couldn't just replicate our North America and EMEA businesses in Japan. This was a unique market, and it required us to align our capabilities accordingly. As such, we took a staged risk-focused approach, initially trading energy futures before growing our financial capabilities and expanding into the physical market in 2021.
We also ensured our team included local Japanese-speaking talent, not just in sales and trading roles but also across the middle and back-office teams. This was especially important given the nuances of the local market and the ability it gave us to respond efficiently to the needs of our local clients and stakeholders. Since entering the market, we have seen a significant uplift in our client engagement and the strengthening of our energy brand not only in Japan but across Asia in general. While this is a great example of growth in-region, our journey's still in an early stage. We currently service a small segment of the market. As such, we see significant growth opportunities. We also see opportunities in Japan's energy transition, with a little under a quarter of the electricity generation currently derived from renewable sources.
In coming years, Japan will require significant investment in renewable energy, including solar, wind, hydro, geothermal, battery, and storage to meet their emissions reductions targets and ongoing energy security challenges, which our business remains well-positioned for. As you can see, a lot of opportunities across our business. In the near term, we continue to focus on expanding our offering, growing our local client base, and supporting the increasing demand from our global clients seeking access to Asian markets. In the medium term, we continue to be excited about the macro themes like energy markets, deregulation, and the variety of opportunities presented by the energy transition. With that, I'll pass to Macquarie Capital and Adam Zaki. Thank you for your time today.
Thanks, Dan. Good morning, all. I'm Adam Zaki. I'm the Global Head of Macquarie Capital Equities, and I've been with Macquarie for 19 years now. I'll be giving you an overview of Macquarie Capital's presence in Asia, having lived there myself for over 18 years before relocating back to Sydney in 2022. Now, starting with our equities franchise, we provide a full-service client and market-facing offering in 11 markets in Asia, which includes all the MSCI-developed and emerging markets. Few competitors share this level of direct access within their own franchise. But beyond providing global clients direct access to these markets, our local presence has enabled us to form long-established relationships with domestic funds. This access to both local and international flows offers a differentiated and mutually beneficial source of liquidity to our clients.
As the Asian economies have developed, the expanding investor class has led to a growing pension base and ultimately a larger investment wallet, as well as the need to diversify portfolios both regionally and globally. We've been well-positioned to offer this access to our clients. We also actively manage the business and evolve it in the face of challenges and opportunities. The industry has continued to see demand increase for passive investments while also facing margin pressure. So we are focused on delivering a differentiated solution to our clients. For example, our research product is evolving from a generalist and broad coverage model to an ecosystem-centric approach, offering a thematic-thought leadership product strongly aligned to Macquarie's firm-wide domain expertise across commodities and energy transition, technology, consumer, and healthcare.
Our most recent example is our piece on ICE to EV, going mass market, examining the electric vehicle segment thematic and opportunities across auto manufacturers, battery and charging components, and technology providers in the space. And across the trading business, this evolution has seen the integration of our regional index strategy, our block-crossing capability, our global program trading presence, our global transition management business, and electronic offerings to further enhance our traditional regional and domestic sales trading expertise. Evolution is going to continue in this space with a renewed focus on the synthetic products due to the compelling market wallet opportunity there. Now, just turning to the private side, the team in Asia provides integrated solutions to our clients through our combined capabilities in advisory, capital markets, development, and principal investing.
Importantly, what's powerful is how we combine the local expertise and networks in Asia with our global capabilities and deep sector knowledge. We do this by positioning the business in areas where we have extensive global sector expertise, such as energy and technology. Connecting those global sector experts with our on-the-ground execution teams in Asia is how we can most benefit clients. Another sector where we have deep expertise globally is critical minerals, which is fundamental to the energy transition, driving demand across Asia. To give you an example of what that means in practice, we recently acted as joint global coordinator on Merdeka Battery Materials, a $616 million IPO on the Indonesian stock exchange, where our global critical minerals team worked with our Asian ECM team and our sales and distribution team in Jakarta in what was the largest IPO Macquarie has led in Indonesia.
We also bring together cross-border capabilities and expertise to support our clients. An example is the collaboration between our ANZ and EMEA teams on the recently announced agreement for MMG Limited, a base metals producer listed on the Hong Kong Stock Exchange to acquire the Khoemacau copper mine in Botswana for an enterprise value of $1.875 billion. To continue to build on this connectivity, we've recently expanded our M&A team in Japan, our infrastructure advisory team in Singapore, and are growing our critical minerals and energy team across Asia. This is also a region where we have specialist capabilities, as you'll hear from Ivan shortly, who leads our infrastructure investment business in Asia, but also in the way we invest and access private capital.
That balance sheet investment allows us to support our partners on their strategic journeys, such as working with the Singaporean Real Estate Fund Elite Partners Capital in the sale of its first pan-European logistics portfolio to Blackstone for EUR 520 million and our continued relationship as we support with the second fund. Likewise, we continue to connect private capital in Asia with global investment opportunities, particularly in high-growth technology companies. With a footprint in Hong Kong, Singapore, China, and the U.S., the private capital tech investment team is focusing on growth-stage Macquarie-led co-investments in sectors including AI, creator economy, enterprise enablers, fintech, and new frontiers. The team currently has more than $2 billion of capital deployed across investments globally and continues to see private capital interest from repeat investors.
Now, with that, I'll hand to Ivan Varughese, our Infrastructure and Energy Capital business, which, like technology, is a sector we have deep and longstanding global expertise that is highly relevant for Asian markets.
Thanks, Adam, for that overview of Macquarie Capital in Asia. My name is Ivan Varughese. I'm Head of the Infrastructure and Energy Capital Group across Asia-Pac, and I've been with Macquarie for 18 years. For the next few minutes, I'd like to zoom in on Macquarie Capital's infrastructure and energy balance sheet investment capabilities across the region. Our investment strategy is to deploy flexible capital to support earlier-stage and higher-risk opportunities than those typically sought by large infrastructure funds. We drive value for these businesses through active management, supporting their transition from early-stage pipelines to bankable projects and pipelines. In truth, our approach is to scale these businesses we invest in to the point that they are attractive to the larger infrastructure funds who we see as our exit market.
As you've already heard today, Asia has really strong market fundamentals, and infrastructure demand is expected to remain strong well into the next decade. There is an estimated $4 trillion investment gap to 2040 across transport, energy, climate adaptation, and digital infrastructure across the region. We're helping to bridge this gap by deploying Macquarie's flexible balance sheet to back growing infrastructure development platforms and companies. We've tailored our strategy by focusing on what makes us different in a competitive market. Our focus is on late-stage growth equity, companies nearing profitability, and those who require capital predominantly to scale, where we partner with experienced management teams who stand to benefit from our networks and ecosystems, scale, and expertise. We support them in prioritizing value creation and scalability, thus positioning these businesses to best address societal demand for critical infrastructure over the long term.
In terms of sectors, we're predominantly focused on digital, energy transition, and social and economic infrastructure. Our approach is to patiently explore opportunities in emerging sectors and technologies, remaining open to those natural adjacencies being created as the definition of infrastructure evolves into the modern industrial revolution. In terms of geographies, we're looking at both stable developed economies as well as emerging markets in Southeast Asia, Northeast Asia, and India. We're particularly excited about the opportunity in India. The country has had nearly $50 billion of foreign investment in 2022 alone and is poised to become the third-largest economy within the next 10 years. These tailwinds are putting India on a sustained growth trajectory, generating the need for huge ongoing infrastructure investment that match our expertise. We have seen this in action recently.
For example, in December, we made a substantial minority investment in ChargeZone, an Indian EV charging company specializing in fast charging networks for electric buses, trucks, and cars. ChargeZone has the second-largest fast charging network in India, with more than 3,500 charging points across more than 1,500 charging stations and has covered more than 20,000 kilometers of highways. The company aims to reach 1 million charging points by 2030 and aims to increasingly integrate solar and wind power generation for its charging stations. We're also focused on addressing demand for digital infrastructure. In May last year, we acquired a majority stake in CloudExtel, a leading network-as-a-service provider, and have supported the company not only expanding their telecom portfolio but also enhancing the quality and effectiveness of connectivity for local communities across the country.
Since then, we've added a strategic partner to further accelerate cloud's growth in India, and you saw the CEO, Kunal Bajaj, on the video earlier highlighting the depth of our support. As the nation embraces a digitalized economy and harnesses the power of 5G technology, the demand for data capacity and digital infrastructure deployment is growing rapidly. This unprecedented surge in demand necessitates substantial investments, and we are proud to support CloudExtel in delivering cost-effective, future-proof networks that meet this exponential growth. These are just a couple of the recent investments in India. We've also made investments in other parts of Asia. For example, since 2021, we've been the majority shareholder in PhilTower, one of the fastest-growing independent telecommunications tower companies in the Philippines, and we've continued to support its growth and expansion ever since.
Our on-the-ground presence in key markets across Asia has positioned us well to build up our local knowledge and create strong partnerships, allowing us to identify compelling opportunities and offer bespoke solutions that suit each of our target markets in the diverse region. And we're constantly learning through experience, backed by Macquarie and IEC's global expertise and track record across the U.S., Europe, and Australia. We're highly optimistic about the future of infrastructure, and we remain deeply committed to seeking out innovative and inspiring management teams and connecting ideas with capital to build a better future in Asia. With that, I'll hand back to Verena to take us through MAM's activities.
Thanks, Ivan. I'll now take you through MAM in Asia. In addition to my Asia CEO role, I'm the head of Macquarie Asia Pacific Infrastructure Fund Series for MAM. It's a mouthful. If you look at the evolution of our business in Asia, we really have been first movers in many of our target markets. Today, MAM Asia has about $50 billion of assets under management across infrastructure, green investments, real estate, fixed income, equities, and multi-asset solutions. MAM has also developed a deep, enduring relationship with a broad base of Asian clients, including sovereign wealth and pension funds. This has really led to Asia playing a critical role in facilitating capital to other parts of Macquarie's global platform, including the recent fundraise in which Macquarie raised $35 billion from Asian investors, and we expect this to continue as new pools of capital expand into this region.
For example, Reina from our Singapore office mentioned in the video the growth we are seeing in high-net-worth markets across Asia. So tailoring solutions for these clients remain a key focus for us. In terms of capital deployment in Asia, we have a tailored strategy per market. MAM's knowledge, experience, and expertise in each of these target markets is really the result of a two-decade history in this region where we started investing with country-specific funds. Following on from this strong foundation, in 2014, we shifted our strategy from country-specific funds to a pan-regional approach with the establishment of Macquarie Asia Pacific Infrastructure Fund, or MAIF. As mentioned before, markets within Asia are far from homogeneous and hence requires the teams on the ground to continuously review macroeconomic themes, the regulatory environment, and transaction opportunity drivers. Indonesia is a really good example of this.
We, like many other investors, have been looking at Indonesia for several years, given the favorable macro dynamics, but really have been waiting for that right opportunity under the right circumstances. Our teams reviewed many potential opportunities over the last decade before we became the first major infrastructure fund to enter the Indonesian market through our investment in Bersama Digital. This investment is one of the largest foreign investments made in digital in Indonesia, with over $1 billion of capital deployed. Our strong track record in the region, coupled with our digital sector expertise and lifting of foreign investment restrictions in Indonesia, meant we were well placed to secure this investment. This has sparked the opportunity for other investors to come in and take a deeper look into certain opportunities, particularly in Southeast Asia.
Staying on digital infrastructure, we've also expanded into data centers in several markets in Asia with one of our portfolio companies called AirTrunk, which is the largest independent hyperscale data center operator in APAC, excluding China. We also see significant opportunities in energy transition for the region, and MAM has really benefited from the addition of the green investments team that moved into the business in 2022. The team's been developing specialist renewable energy platforms in solar, wind, and storage through Corio Generation and Blueleaf. In real estate, we have a strong track record with more than 15 years of experience, and in this sector, we partner with specialist operating platforms to unlock quality real estate opportunities. In recent years, we've been partnering with Unified Industrial, and MAM's been leading the expansion of industrial real estate businesses in Japan, China, and across Asia-Pacific more broadly.
So as mentioned previously, MAM in Asia really has been first movers in many of our target markets, and Korea is a good example of where we've been very successful and hence the reason why we're highlighting it today. So Macquarie has been active in South Korea for 24 years now. It's a key market in the region, both in terms of investment opportunities and fundraising. We went into Korea in the early 2000s, where we saw a shift in the Korean government policies embracing greater private sector investments in infrastructure. This led to the establishment of our first transportation fund, and today we've had more than five funds invest in infrastructure opportunities, making us the largest foreign infrastructure fund manager in Korea with a proven track record.
We manage over $19 billion across more than 40 assets, employing close to 35,000 people, and to date we have delivered a gross IRR of 13% for our diversified assets. We couldn't have done this without the team on the grounds there, and some of our senior team members joined as business analysts more than 20 years ago and have been key to the consistent growth of the franchise. Our success here, again, comes down to our approach. Fundamental to this is our local presence, relationships, expertise, and a differentiated strategy. We've developed deep and trusted relationships with Korean CEOs, key investors, pension funds, and insurers to support local and global opportunities. So LG CNS in Korea, who was featured in the video earlier, is a great example of our local partnerships and the trust we have established over time.
Notably, we were also early movers in Korea's waste-to-energy industry, establishing a targeted consolidation plan that involved acquiring three assets into that sector, including Koentec, in 2017. We have now successfully divested from all three assets, achieving a combined IRR of about 26% and money multiple of about 2.5x. Over time, we have diversified our investment portfolio, growing from our base in traditional infrastructure such as roads and utilities into more alternative asset classes, including IT services, industrial gas, hydrogen distribution, and also one of Korea's largest transportation settlement platforms. As part of this strategy, we acquired a 35% stake in Korea's second-largest digital services company, LG CNS, in 2020, and we are really pleased to have supported LG CNS through a period of robust growth, having seen EBITDA grow at 15% CAGR.
These investments really showcase the team's ability to execute complex transactions but also proactively manage assets to really drive alpha in this region. We're excited about what more we can do in Korea with its rapidly evolving economy and the government's increased focus on sustainability and energy transition. Korea is particularly well placed to benefit from energy transition, having delivered around $19 billion of investments in 2022, making it the seventh-largest market globally to do so. We are actively developing various fixed and floating offshore wind projects with our partner, TotalEnergies. Further, its advanced manufacturing expertise has enabled us to get a really strong foothold in areas like lithium-ion battery, where Korea is a global leader. For Macquarie, Korea is a great example of how developing deep pools of local and international capital and expertise enables decades of sustainable investments.
So before we go to Q&A, I'd like to briefly recap on the growth opportunities we see next in Asia. You've heard from all the groups just now that Asia is becoming more important to this constantly changing world with many opportunities and long-term growth drivers that are aligned to our expertise, something we are obviously very excited about. We have talked about how we continue to help connect Asia to the world, further growing our presence in high-potential markets and leveraging our strong global capabilities, and these are consistent key themes across all our businesses. Again, as you've heard several times now, Asia is far from homogeneous and diverse. The strong foundation of our local teams that we have invested over the years will enable us to further deepen relationships on the ground and support our business growth. So I'll hand over to Sam for Q&A.
All right.
Thank you.
Thanks, Verena. So we'll start with questions in the room, and then we'll go to the line. We've probably got five or 10 minutes for questions. So anyone in the room? Ed? Just in the second row? Thanks.
Thank you. It's Ed Henning from CLSA. Now, while this might be asking what your favorite child is, I'm just interested, looking across Asia, what do you see as the biggest near-term potential positive for Macquarie? Also same question over medium or long-term.
So I think, as you would have heard from everyone, we're pretty optimistic about Asia as a whole across all the businesses. If you look at our history, we've actually again, you've heard this, doubled our income over the last 10 years. That translates to about 7% CAGR annually. So we're very optimistic, obviously, about what we've done in the last 10 years. I think if you look at it from a macro dynamic perspective, Asia's looking pretty positive. So the fact that we've been looking at Indonesia for the last 15 years, probably looked at more than 100 opportunities, and now is the right time to go in, and we've invested more than $1 billion of capital, demonstrates the long journey we've been in Asia.
So I just come back to the fact that we've really, in that period, we've really established a very strong local presence in our different markets, a very strong team, and that's what you really need to differentiate yourself in this part of the world, and we've got the makings of that. So now, with more favorable political reform, regulatory environment, and more sort of transactions or executable transactions, I think every single business group in Asia is well positioned to really prosecute on those opportunities.
Thank you. But there's no one standout, whether you're CGM or MAM.
I don't have a favorite child.
Okay. No worries. That's fine. Thank you.
My child, obviously.
Exactly.
Andrew?
Thank you. Andrew Triggs and Jake Bowman. Just a question, perhaps for Dan, on the physical power and gas business. My understanding is the inventory management and trading line in the CGM business is very weighted to North America, and I think Nick O'Kane said at the U.S. Investor Tour that the opportunities in Europe were smaller given differences in market structure. Is that also the case in Asia, and is there a sizable opportunity there in any of those individual markets?
Yeah. I think that that's right, that it is different in Asia, once again. Our North American business is very established and touches a lot of different points, which allows us to provide a really good service to our clients. We're hoping to replicate that as much as possible. Obviously, Japan is a bigger opportunity than Australia, and we're really excited by that and still growing, so let's see where it goes. But it's definitely different to the other markets we operate in.
As an example, I mean, Japan, big importer of LNG rather than a big producer like the U.S. is. Is that one of the reasons and are there markets that look like the U.S. that could present decent opportunities?
I guess the answer to that is that there's the Japan power business itself, which is the local market that we're dealing in. The LNG, the oil, and other commodities that we're touching in foreign exchange, that's all been an add-on as we've brought on these clients. So we've been able to offer the whole service to these clients, which is really exciting. And yes, we're doing, I guess, LNG hedging, some LNG supply for all of our clients around the world, but Japan's part of that story as well.
Jon?
John Mott from Barrenjoey. Just going to keep going. The theme you put up on your slide, Dan, about the areas you've got, commodities, financial markets, and asset management, and just Triggs's question about the growth coming through in the commodity space. Can you just give us a breakdown at the moment out of those three areas where the revenues may? What percentage is financial markets? I presume that's still the biggest part, and how much comes from commodities versus asset management?
In Asia specifically?
Yeah.
I don't think I have those numbers to hand. Do we have that? Okay. Yeah. I'll jump in. So maybe, John, the way to think about this is this working? Oh, okay. The way to think about this is the asset management business or asset finance business in Asia has been well established for a long period of time. So if you think about think about the semiconductor manufacturing equipment that Dan talked about before, so it's pretty well established. So it probably outperforms in Asia relative to what you're seeing around the world. So if you think about the world, the world's about 15% from asset finance. Asia's probably a higher proportion coming out of there. Financial markets is well established in Asia, and you obviously talked about Simon talked about the Japanese FX-type business, which is now pretty well established.
So it probably outperforms in terms of the typical 25% share, and then commodities, as a result, is slightly lower proportion. But the opportunity set, I think, in Asia on the commodity side, obviously, as we've talked about over the last few years, we've really been growing at that capability, particularly in gas and power and energy from the U.S. into Europe and then into Asia. So you'd imagine over time, as we start to build out that footprint, commodities, as it broadly as the diversified offering will continue to sort of start to represent a larger proportion and more consistent with what we're seeing globally.
Yep. Thank you.
Great. We've just got two questions on the line, so we'll go to the lines, please.
Matthew Wilson with Jefferies. Please go ahead.
Yeah. Good morning. Thanks, team. Matthew Wilson, Jefferies. How are the challenges and changes in China impacting your longer-term perspective on where you see growth and opportunity? Where is it likely to come from? Has there been a pivot to India, Southeast Asia, and Japan? In your 2019 presentation, China was highlighted for the opportunity in cross-border flows. Has that really manifest?
I might take this. Okay. So in terms of China, China is still the second-largest economy in the world, so it's a very large market, and we've been in China for a very long time, so close to two decades across all of the business groups. From an opportunity standpoint, I think the one thing that we continue to really experience in Asia is that the markets keep changing and the markets keep rapidly evolving. So we would need to, obviously, monitor the situation that China is in at the moment. But as you say, we do have access to other markets within Asia, whether it be India and Southeast Asia. And so from a risk-return perspective, we're obviously monitoring all of these markets, and our job is to find and allocate capital where it's most optimal.
Having said that, China continues to remain very important from a capital-raising perspective, and we've sourced quite a lot of capital. As mentioned in the European Infrastructure Fund, half of that capital commitment came from Asia-based LPs, and we continue to see China as an important source of capital for our global opportunities. And Dan mentioned China relationships and the connectivity we have from a CGM perspective will only continue to grow.
Thank you.
We've just got one more on the line.
Yes. From Andrei Stadnik with Morgan Stanley. Please go ahead.
Thanks. Good morning, Verena. I have a question on slide 24, and that's the slide where you show that the Asia five-year contribution across group operating income has been about 10%, whereas term funding rates have been over 30%, and MAM fund raising's been over 25%. So there are some areas where Asia's clearly punching very hard in terms of its contribution to the group. But then what are you looking for in terms of lifting the actual income contribution to the group going forward?
Yeah. So as mentioned, we've been very consistent in terms of our contribution to the overall group's earnings. And again, actually, if you look at how much Asia's done, we've actually doubled in the last 10 years. But obviously, other parts of the world have also grown quite strongly. Where it's not captured fully, I believe, is that capital raise that you talked about. So obviously, we don't book the funding or the capital raised explicitly into Asia because we're supporting global opportunities. So we don't really mind where it's booked, but obviously, that is coming from Asia, so potentially not being demonstrated in that sort of percentage to group earning percentage. But you can see that it's been growing quite rapidly.
Thank you.
Great. All right. We'll leave that there. I'll ask Verena and the team to exit the stage. Thank you.
Thank you.
And then I'll ask the BFS team to come up. Greg Ward, Ben Perham, Olivia McArdle, and Richard Heeley. And if we could just get the front table refreshed, that'd be great. Thank you.
Business today. As you know, BFS is our retail banking business, just focused on the Australian market. As you can see, they're 1.85 million customers. It's a really small business, quite a narrow business, servicing our customers through our personal banking, business banking, wealth management, and deposits and payments channels. And you can see on the right-hand part of that slide there, a whole series of awards which we've won recognizing our digital leadership. Long history in retail banking dating back right to the 1980s with the establishment of the Cash Management Trust, which we know as the Cash Management Account now, and the gaining of the banking license back in 1985, which a lot of the businesses benefit from.
If I fast-forward to 2013, we recognized the opportunity that we had in front of us there, and we observed a change in customer behavior, customers getting more and more comfortable doing more things online, and in fact, a preference to do more things online, including banking. And we also observed a change in technology, significant advances in the internet capability, mobile banking, cloud technologies, and data capabilities, and so forth. And we thought there was a tremendous opportunity for a brand like ours with a really strong reputation and an ability to attract really talented leadership and with a history of innovation to do something special. And so we set about exiting all of our overseas activities and a series of businesses that were conducted here in Australia and other activities, and just focusing on the strategy, which is all about leveraging technology and having a very simple operation.
That deliberate strategy has worked really well for us. I'd just like to remind you that, consistent with other parts of Macquarie, we really like staff to have a long tenure. We think that aligns their interests with shareholder interests. Joining me today from BFS is Ben Perham. Ben's been with Macquarie for 27 years. He's worked across MAM and Macquarie Capital, both here and in New York. He was a big part of the driver of the strategy in BFS in 2013 when he joined BFS, and we put in place the strategy. Since 2016, he's been leading the personal bank.
Olivia McArdle joined us nearly 20 years ago in the Financial Management Group and has had a series of CFO and COO roles here and in New York and joined BFS nearly a decade ago now, in 2014, and is head of our deposits and payments channel, and we'll talk about that. Finally, Richard Heeley had joined Macquarie in 2014. When we were putting in our core banking system in 2014, we recognized how important that was in terms of setting us up for the future and personally how important it was that it went well because I think there's a lot of these programs that can go badly. We look for a global leader in core banking. Richard was leading the core banking transformation program on SAP at Nationwide in the U.K. Richard joined us.
And he, along with Tony Graham and our Chief Digital Officer, Ashwin Sinha, and Luis, our Chief Digital Officer, have been a big part of our tech leadership over time. Now, we're delighted with how far we've come over the last 10 years. We have delivered dramatic growth in a very competitive industry. And you can see in the charts here, we compare our compound we show our compound growth rates over the last 10 years ranging from 15%-24%. And we've achieved that through a very disciplined and deliberate strategy, managing risk, writing good business, and delivering customer value and hence delivering shareholder value. We haven't been a price leader. We haven't cut corners. And we haven't had to go down the credit curve to drive that growth.
You can see on the bottom left part of that chart, there's been a really significant investment in technology, and that's more than tripled over the last 10 years. We're very pleased with the way that's been delivering for our customers and for the business. It's that investment in technology and the efficiencies that that's created for us that has allowed us to retain or have the other expenses be very, very low. You see there are CAGR of 3% over that period, and we think that's a really good performance given the business growth of 15%-24% over that period and in a period as well where there's been dramatic regulatory demands and inflationary pressures. While we're really pleased with the progress that we've made here, what's even more encouraging is the size of the opportunity that we have in front of us.
The markets or the segments of the markets in which we've chosen to operate are extraordinarily large and have been growing consistently over a period of time. So the opportunity here is to benefit from the growth in those markets and, given our very small market shares, the opportunity to dramatically increase our market share. On this slide here, I highlight progress in some of the strategic focus areas. You can see here our commitment to delivering exceptional customer experiences across our platforms is coming through. You see that in the NPS scores. That top-right bar chart there, you can see the NPS score we have, and it's significantly better than the four major banks that we compete against. Richard's going to talk in some detail about our technology leadership.
And you can see on that slide, 96% of our applications on cloud, an absolutely remarkable figure and obviously significantly higher than all industry peers. And that gives us superior speed and reliability, and that underpins the digital experience. And you can see there the digital experience of the mobile banking and internet banking. And I think last week, that was tracking at 60% on the mobile banking, which is extraordinary. And like all of Macquarie's businesses, exceptional risk management is absolutely fundamental. And we're delighted with our leadership position there when it comes to risk performance. Turning now to the wealth management business in detail. And here, we support thousands of advisors and their businesses and their clients in terms of the Wrap business and the broader wealth solution offering. And you can see there in the top-right chart, the consistent growth in the Macquarie Wrap platform.
It's AUD 133 billion now, and it's the second-largest Wrap platform in the industry with a really material market share of 22% and continuing strong inflows. The significant opportunity for us here is obviously to keep growing the size of that business but also to dramatically evolve the business. We can see a really big opportunity to significantly evolve our digital capability, and that is going to materially streamline this operation, providing a really big benefit to advisors and their clients and, I think, dramatically increase the efficiency of this business. Advisors are already starting to see this through some of the rollouts we've made through Adviser Online . We also have the leading private bank for high-net-worth clients. We're really pleased with the growth in this business. We're onboarding about 1,000 new clients each year at the moment, and there's a significant runway for future growth there.
And like the Wrap platform, I expect to see a really dramatic increase in the efficiency of this business as we put more of the technology to work here. I'll turn now to the business bank. You can see in the charts here, the loan portfolio, AUD 16 billion, and the deposit portfolio, AUD 22 billion. There's been consistent growth in those portfolios over time. While it's good to see growth in those portfolios and some of that coming from clients doing well and their lending balances and deposit balances growing, the other pleasing part of that is the growth in client numbers. You can see there 8% growth just in the last 12 months. Our focus in this business is leveraging our deep sector expertise across a limited number of core segments. That's worked really well for us over many, many years now.
The benefit of that, of course, is that we know these sectors very, very well, and we're able to, I think, write the best quality business in those segments. You see that coming through in our extremely low loss rates at the top, which is well ahead of industry expectations there. In recent years, the focus really has been on applying the technology foundations that we have in the personal bank into the business bank. I highlight two of those on this slide. You can see, firstly, Macquarie Business Online. Here, we've significantly enhanced our digital capabilities for our business banking clients. We've moved all of our clients onto this new platform. Almost all of the functions that clients need to perform are now available digitally to them on this platform. That has resonated really well with business banking clients.
You can see there the NPS score lifting from 18 to 26 already, and there's still a long way for us to go here. We've also invested in the Origination Platform, and this is going to help us accelerate growth in this area going forward. It's early days here, but we're already seeing a 15% improvement in time to decision and the significant removal of manual processes. What I'm hoping for here, personal bank, which was absolutely fundamental to the success of personal bank, will be equally as transformational to the business bank. Let me now hand over to Ben, and he can talk a bit more about the personal bank.
Well, thank you, Greg, and good morning, everyone. As you can see on the slide here, we now have AUD 118 billion of home loans and personal banking, and that's a 24% CAGR over the last 10 years. And as you all know, we've grown by taking market share. In 2013, we had 0.5% of market share, and that's now sitting at 5.3% as of December. We're showing a 10-year view in many of our charts to underscore that the outcomes you're seeing today are the result of a very deliberate, patient, and long-term strategy. So I thought I'd just highlight some of the dimensions of that strategy in relation to personal banking. Firstly, we're building Australia's best digital bank, investing heavily in technology across the full stack from the customer experience layer through to the core systems.
Secondly, we have a very disciplined and rational approach to pricing and return on capital. Thirdly, we're focused on simplification and being the lowest-cost operator. And lastly, since 2018, we've focused exclusively on building Macquarie's retail brand rather than partnering with other brands. In that bottom left-hand chart there, you can see that there was a step change in 2019 when customers really started to see us as a tier-one lender, loving our digital proposition and seeing it as the best in market. As Greg mentioned, we're playing a video later with some of our customers and one of our brokers talking about why they choose to bank with Macquarie. And I think you'll see just how passionate they are and how much they love the digital experience.
That bottom left-hand chart shows that our market share of new settlements since 2019 has frequently been above 10% for low LVR business. You can see that today, we've chosen not to focus on above 80% LVR lending. Keep in mind that those percentages are for the total market, both broker and non-broker. So if we think about just the broker part of the market, our market share is much higher than this. There have been sustained periods when our market share of the broker channel has been in the region of 15%-20% for low LVR business. On the topic of our disciplined and rational approach to pricing and return on capital, I'll just remind you that we have never offered cashbacks because we thought that did not make sense either strategically or for shareholder returns.
Having said that, competing against them was certainly a headwind for us. And to illustrate that, we can compare our market share in June and July because July was the first month when some lenders ceased their cashback offerings. In June, our market share of broker applications was 10%. I'm talking across all LVR bands in that context. And that increased to 17% in July, the first month when some of the lenders stopped their cashbacks. So when we think about our future potential, we think those data points are instructive because they illustrate just how strongly our brand and our digital proposition is resonating with customers and what our fulfillment engine is capable of. But of course, it is a very competitive market, and there will be periods of time when we think returns are below the level that shareholders expect.
And so you should expect to see our market share and our growth fluctuate over time. In December and January, for example, our market share of new applications was well below what we've achieved in recent years. We had increased our home loan rates in response to higher input costs. I'm referring, of course, to the Term Funding Facility, sorry, to the higher funding costs as a result of the Term Funding Facility being repaid, which is an industry-wide phenomenon. And that led to a steep fall in our market share of home loans because we seemed to be targeting a higher ROE than some of our competitors. As I said earlier, and consistent with Macquarie's DNA, we have a patient and long-term mindset to delivering on the opportunity we see and to achieving returns that are acceptable to shareholders.
In the bottom right-hand chart there, we're showing our time to approval, which is an important part of the customer experience and the broker experience. We've had the best-in-market approval times for many years now, and that was a key factor in winning confidence in the broker channel in the early years of our success. That chart's important as well because it shows that we've maintained consistent approval times over time despite a fourfold increase in volumes. That speaks to our deliberate investment in technology and processes that are scalable. We set out to be a committed partner to the broker channel, and we made that real through our investment choices and through delivering them a superior experience. Being a committed partner to the broker channel has been a differentiator strategy for us, as you all saw during the Banking Royal Commission.
Greg mentioned this in his slides, but brokers have voted us the best major lender for the last four years running in the Peak Industry Award. We see that as a proof point that they do see us as a committed partner and a tier-one lender. I'll just briefly mention our direct business, which we note here was 6% of our year-to-date settlements. In market share terms, we have about 1% of the non-broker market, but of course, that's comparing us against all branch lending. We do see direct as a future growth opportunity as more customers come to see the value of our superior digital offering relative to branch banking and as we continue to build Macquarie's brand to be as iconic in retail as it already is in the corporate space. Greg mentioned our approach to cost management.
I'll just elaborate on that in the context of personal banking. From a cost perspective, we effectively have three businesses in personal banking: our broker home loans business, our direct home loans business, and our car lending business. Of those three, only the broker home loans business is just now starting to benefit from some scale economies. And we already have a very competitive cost structure there with a CTI in the 30s. We think we can improve on that and have an even more competitive cost structure as we continue to take market share and increase scale. By contrast, the direct home loans business does not yet have any meaningful scale. So we think about our investments there differently. We're investing for long-term strategic value, and so we think near-term cost ratios are not the right measure for that part of the business.
And similarly, in our car lending business - and Shemara mentioned this - it's still early days in our repositioning of car lending following the exit of our dealer finance operations. And so, like direct home loans, car lending is in an investment phase. I'll turn to the next slide. And in the top left-hand chart here, we're showing our annual settlements. As I mentioned, we sort of step changed from 2019 onwards. And we're showing here in the grey line the composition of our current book by LVR band sorry, book by vintage year. In the bottom left-hand chart, we're showing our settlements by LVR band. And you can see we deliberately moved away from above 80% LVR lending in those early few years of this current strategy. As I mentioned, that's been a differentiator strategy, as you can see, from our lower market share above 80% LVR.
Through that strategic focus, we think we have the best credit quality book in the country. And you can see that in the top right-hand chart where we're showing our 90+ arrears rate sitting at 0.3%, which we think compares extremely favorably to the market. Our dynamic LVR sits at just over 50%, which we're very comfortable with. And turn to the next slide. The bar charts here are showing our portfolio over time. You can see in the top left chart how we repositioned the business to be focused on P&I lending. In the bottom left, you can see that we had a consistent mix of owner-occupiers. We know that we are slightly more attractive to investors in the market, and that's a deliberate risk-return choice that we're making.
In the top right-hand chart, our proportion of fixed-rate business has often been lower than market, which again is a result of disciplined risk-return choices. For example, we are highly rational when it comes to the assumption we make about the revert rate a customer will pay at the end of their fixed-rate period. And that means that sometimes our fixed rates are not competitive and hence our lower share of fixed rate compared to market. In that last chart there, we're showing our external refinance rate over time. And you can see that it increased sharply over 2022 and the first half of 2023, which, of course, was a result of the intense cashback phenomenon in the market. I'll now hand over to Olivia McArdle, who's the head of deposits and payments for BFS. Thanks very much.
Thanks, Ben. I think I can still say good morning, Just. BFS has the fifth-largest deposit portfolio in Australia at AUD 136 billion. We represent 4.9% of the market, and we have 1.4 million deposit holders. We differentiate our deposit offering with superior origination, transparent pricing, and a high-quality platform integration suite. BFS deposits are key to our liability-led growth strategy and the funding that we provide to the lending businesses that Ben has discussed across homes, business banking, and cars. If we look at the BFS deposits fund in the bottom left chart, we've seen significant growth over the recent years, particularly from FY 2019 onwards, where our fund more than doubled to AUD 136 billion. In the years prior to FY 2019, we had excess deposits to our lending requirements.
The higher growth rate in deposits since then was a deliberate strategy to support the higher lending growth over that time. Our consumer retail deposit offerings are key pillars of this strategy. We have a differentiated everyday transaction account and an award-winning high-interest savings account. Of course, these are digitally native products. You can open a new account in two minutes, and if you're an existing customer, it only takes a couple of seconds. They're highly scalable. They have a cost structure that makes us extremely competitive. And with the growth of these products, you can see that we've dramatically transformed the diversification of our deposit base. You can see that on the right-hand charts. The relatively new products are only seven years old, but we're confident in their future growth.
So we focus on offering the best digital functionality, deliver our customers a seamless and secure experience, we pay competitive rates, and no fees. In addition to the normal expected functions of a bank account, you want online access to your funds, real-time payments, all those usual things. We've then further differentiated our offering, and we enhance the customer experience beyond those usual features. As an example, on our transaction account, we made the bold decision to pay the same rate on that account as we pay on our savings account. This is something that no major bank is doing. We hear from our customers that they love the transparency of this approach, plus the ease that it brings to their everyday life admin, saves them time of moving money from one account to another and chasing that higher rate.
We've seen a fourfold increase in the fund of this product since that decision. Similarly, on the high-interest savings account, we made the decision to have a competitive rate but no conditions. There's no hoops or catches, and our customers love this because, again, saves them on having to worry about are they meeting those conditions, the five taps, the transaction, the balance going up, no withdrawals, all those kinds of things. It's another example of the transparency of our approach, and they always get the rate that they're expecting. So the simplicity of this offer, there's no complex conditions to monitor, no customer complaints when they don't get the rate they're expecting, and of course, the digital account opening experience that we discussed, all of this makes it a lower-cost offering that rewards both our customers and shareholders.
In addition to that, we know that security and trust is paramount to banking customers. In that regard, we have our Macquarie Authenticator app. It's unique in market and market-leading, gives customers a superior protection on their bank account, and it's a multi-factor authentication. It does not rely on SMS or mobile coverage. It provides detailed alerts and actionable notifications that allow our customers to authorize both transactions and any changes to their account before they happen. It keeps them safe 24/7 no matter where they are. We took all of that that we did for retail customers, and we've replicated it for small businesses. We call this our business savings account. Again, we made bold decisions with this product.
Firstly, it's only digitally native, so small businesses can apply from the comfort of their home or their small business at a time that suits them, pays a strong interest rate, and again, no fees. These are quite rare in market. It's very early days, but we're seeing good signs of success. So in addition to those normal bank accounts, transaction and savings, we also offer term deposits. And we offer them to all types of businesses, retail customers both through our advisors and direct. We've shown an ability to onboard large amounts of customers when the economics make sense. If you compare the mix of our deposit base, so our proportion of term deposits to market, it's evident to us that the significant opportunity to increase market share.
And then from a business banking perspective, Greg spoke about our foundation segments where we continue to see good volumes through the usual segments of real estate, insurance, and strata as those industries continue to value the integrations that we have here that make the efficiencies in their back office key and easier to access. And then finally, in wealth, we have the Macquarie Cash Management Account. It continues to be the market-leading cash hub for advised clients. It's our most mature product, and our longstanding commitment to the wealth sector as well as continued investment in software integrations has been a key differentiator here. And then in 2020, we added on the Accelerator Savings Account. So that offered a real-time, high-interest option for anyone that was using their cash hub, and that's continued to propel growth in the wealth segment.
So looking at this next slide, all of the product offerings I've talked about, the enhancements I've mentioned, that's all led to a well-balanced and diversified portfolio, and we're really pleased with the traction we're seeing. There's a couple of stats here that highlight that. So starting in the retail space, our everyday transaction account numbers are up 58% in the last 12 months to December. From a wealth perspective, one in three self-managed super funds in Australia hold a Macquarie CMA. So we see the wealth community, both advisors and their clients, they love the connectivity that we see in this space. So examples of that connectivity, we're hooked into more than 130 wealth and business banking platforms.
So what that means is that if you're an advisor or a business banking client, you have access to accurate and real-time data feeds at all time, and you've also got a single account opening experience. That means that they can open the account with us from a platform of their choice. Now, keep in mind, we talk about these integrations, but the scale and the quality of them have been the result of decades of investment in those relationships and hooking our platforms to those partners. And they differentiate our offering from anything else in market. And they also mean that our advisors and our business banking clients have more time to spend with their customers and less on the back office reconciliations. Again, with a business banking lens, we have DEFT.
So in the 1990s, we were the first outsource provider of rent payment collection for Australian real estate agents, and this improved their operational efficiency. It meant that they could collect payments remotely and also helped with their reconciliations. Over time, we added new payment methods, and of course, we removed old ones. We've improved the quality and the number of integrations with the software platforms across business banking. So now, not only is real estate, there's also extended our capabilities from accounts receivable to accounts payable because we wanted to give the same benefit to our business banking clients that they could initiate payments from their software of choice instead of having to come and manually enter them into ours. So we continue to invest in DEFT going forward with real-time payments, fraud controls, and further integrations with more industries.
Then finally, due to the deliberate mix of our customers, we have a very strong FCS coverage at 57% of our deposits. Now, while this is not reported explicitly, we've seen analysis that indicates 57% is the highest in market. We'll now move to a short video that covers a couple of customer journeys from both a home loans and deposits perspective, and then I'll hand over to Richard Heeley, who's our head of technology and CIO for BFS.
Over the last 10 years, we've been investing in our retail bank, building a scalable technology foundation to deliver an intuitive, personalized, and seamless digital banking proposition with world-class experiences for our customers so they can be proud to say, "I bank with Macquarie".
A good digital experience is definitely important to me. Obviously, you don't know about it until you're already with the bank, but now that I'm with Macquarie, it definitely makes me not want to jump to another bank because it is so much better than the previous lender that I was with. The app for Macquarie is really good. It's very user-friendly. I love the marketplace at Macquarie's online banking. You can get discounts off gift cards from a lot of Australia's major retailers, and it's often hard to find these discounted gift cards anywhere else. I trust Macquarie Bank with my finances because they have a good reputation, and they've got a safe and secure digital experience.
Speed equals trust in the world we live in, and more than ever, clients have an expectation that they're going to have speed, and they're going to have convenience. With Macquarie, we can offer both. I think the ability to have a digital process from end to end has made the loan application process, everything from the onboarding of a client all the way to the application launchment and all the way through to settlement and onboard, incredibly important. Macquarie allows us to provide that experience for our clients.
When I think back to our first conversation with Macquarie, it felt like Macquarie was in a position to grow with us and to adjust accordingly to what we needed as a family. For me personally, the thing that's most important from a savings account perspective is ease of use, and I definitely get that with the Macquarie app. I do use the Authenticator app often a few times a day. I think it just gives you that added peace of mind that there's an added layer of protection from a cyber perspective on transfers that you're making through the app. I'm not particularly tech-savvy, so even I can work out how to use it. If I ever miss the window, I get distracted halfway through the process.
I just need to go back and tap on that request again, and then it takes me straight back to authenticating again. It was really convenient travelling with the Macquarie cards because I didn't need another physical card, which I normally would have had from times gone by. So it just meant that all the infrastructure we had in Australia worked perfectly overseas. I was really surprised that there was no international fees associated with transactions on my Macquarie cards. Times gone by. That was actually really something to think about.
I started banking with Macquarie, I think, six years ago as part of their beta testers. For me, I was just looking for a bit of a refreshing offering. The first time I opened an account, I was astounded by how easy it was. I was very impressed by that it was completely done on mobile. It was finished in a couple of steps, and it also did all the background searches real-time. I think the reason I stay with Macquarie is because it fulfills all my banking needs. Really, it's quite simple what I need. I need to receive money. I need to send money. And I need to use money. The app allows me to do those things in a very robust way.
When we were looking to get a home loan, I felt like Macquarie Bank felt approachable and youthful and fresh in a category that can often feel really samey, samey. It felt like there was a point of difference, and it felt like they spoke to where I was at the point in time in my life. I love the Macquarie Banking app. I think it's easy to use. I think it's been designed in a really clean and simple way. I banked, obviously, with other institutions, and I think for me, the ease of use of the digital platforms and the app and the Authenticator app, it all sort of makes sense to me, and the flow suits the way that I like to bank.
Despite the fact that getting a home loan is this big milestone in someone's life, I found the experience with Macquarie was easy in the beginning. It was easy in the middle, and it continues to be easy now given that everything that I do with the bank is so low touch and everything that is designed to be that way. The fact that I want to expand my relationship with the bank is something that is a testament to the way that they treat their customers, and I've always been proud to bank with Macquarie.
Well, it's good afternoon, everybody, now. So a fantastic video there showing some of our client experiences. Always great to hear how they're using those products as well. We've got a fantastic technology story here in BFS, and we're proud of that transformation over the last 10 years. I joined the business in 2014, right at the beginning of that journey, and it's been remarkable to see the progress we've made. So we've transformed most of the BFS technology stack, building it up from the ground. So we've got a brand new core banking platform with SAP. We have a brand new payments platform, a new mobile banking platform, a new internet banking platform in all channels, and a new CRM system. Virtually every part of the stack has been reimagined and rebuilt for digital engagement. So why did we do this?
Well, we've built the platforms really from the ground up for two reasons: to ensure that we have no legacy technology that's going to impair our speed and agility as a business, but also to ensure we're future-fit, purpose-built to handle higher volumes while maintaining performance into the future. And hopefully, you've seen it's paying dividends that we've modernized the organization and supporting the growth that Greg and Ben and Liv mentioned today. So I'd like to pick out some aspects of that technology transformation to highlight how we're future-proofing the BFS business and setting it up for success for the long term. So Liv mentioned new-to-bank and origination. If you're a new-to-bank customer, that origination process will take a few minutes. If you're an existing customer, that will take a couple of seconds.
For business banking, we've rebuilt that process with nCino to have the best possible lending origination processes so those clients can have certainty on their funding to support their needs as quickly as possible, and we'll scale that further. In digital experience, you've hopefully seen again from the video, we've taken a lead in the market in a number of areas from natural language search to push notification, and we'll look to distinguish our offerings further with innovations and personalized content. Macquarie Authenticator has been mentioned a few times this morning, but I want to call it out again because it's a good example of how we can differentiate our service. Most organizations have an authentication service today. They'll use a tick box, a rolling code, a four-digit PIN. What we're trying to do with Authenticator is be different.
What we're trying to do to our customers and with our customers is provide alerts and actionable notifications in real time. So what that means is they get personalization and context. So that's a specific detail on a transactional alert. That might be the geolocation login for a particular transaction or the type of browser or device being used. So those things, those contexts really help our customers. From a data and analytics perspective, we've made significant investments over the last few years to house all of our data in a single data warehouse. Why did we do that? We recognized a long time ago that data as a key asset for us but also for our customers, and we wanted to make sure we could use that data quickly and efficiently.
A good example is in Ben's personal banking business where we've created the variable rate review for all Macquarie customers so that they can review their current mortgage rate and determine in real time if an improved rate is available to them. It's an investment using that clean and fast data, and it's allowed us to build that feature quickly for the business but also for our customers while we're also reducing our operational costs in the back office. Finally, our multi-cloud strategy. Since 2016, I think we've proven to be a frontrunner in Australian financial services in the use for us, AWS and Google Cloud. We use AWS to support our key infrastructure like SAP core banking, which we migrated in 2021, and for Google Cloud, specifically for digital and data user experiences because we believe that Google is a leader in these areas.
The decision to use public cloud was driven by our view that it's the best solution to meet the needs of the businesses, which is scale, agility, security, and performance. So more than 96% of our applications are in that public cloud estate, and we have plans to get that to 100%. Crucially, all these applications have been purpose-built for the cloud environment. You'll hear a lot of organizations moving to cloud. You've heard it before. There's really two ways of doing that. You can lift and shift what you've got and put it on cloud, or you can re-engineer and re-architect. We've taken that latter way of working. And so for BFS, we've re-engineered our platforms as we've moved them to cloud so that we can make use of those cloud-native services for our business.
We engineer our digital platforms to have the highest levels of availability so that it don't go down for regular maintenance. For customers, they want it there all day, every day, and not when we say we're available. So we'll talk about this in a little while, but it being 24/7 and being available at the speed of now. Speed of now means a sub-second response. To power this, we've built a fantastic technology team, a deep base of engineering talent in the organization. Since 2016, we've been using Enterprise Agile as our way of working. We didn't move to Agile because it was a buzzword in the industry. We did it for reliability, cadence of delivery, and to bring new digital features to our customers at the fastest possible speed.
We were recognized by the World Agility Forum as the best place to work for Agile in the world back in 2021, and we continue to improve the model. We now operate in a platform-based model based on the best way the leading technology companies operate. Taking those technology companies' learnings into this model, we launched a new division internally, which we call DQD, Digital Data Design and Engineering. The purpose of the change, though, is to focus on our aspiration to be the best technology company in financial services, to provide better reliability for those services and with the fastest levels of innovation. We constantly talk about recognizing value prioritization across the platform teams. This constant thinking about prioritization means we don't waste time and money and energy on things that our customers haven't asked for or our businesses don't need.
The percentage of the workforce in technology will continue to grow as we build out our capabilities but also as we use technologies like machine learning and AI to improve operational efficiency. Looking to the future, I just wanted to call out a couple of things that will be our focus, an absolute focus on reliability. We want to be always on for our customers and available at the speed of now, that sub-second response. So we want to be there for our customers when they need us. So we can see from the RBA statistics on faster payments that we're more available for our clients compared to industry, but we want to improve further. We're going to set ourselves a really high bar on that.
We'll continue to invest heavily in safety and security for our clients through Authenticator and other means so that they know that they can trust Macquarie with our banking needs. And finally, we see the future of banking as highly personalized, and for us, we're going to make a significant investment over the next few years on an omnichannel experience for our customers. What that means is what we're going to do is we're going to consume every interaction that our customers make into our event-driven architecture, and we're going to utilize those interactions from our customers to provide that best experience. A customer should not be contacting us without us knowing proactively that they have a problem. So we think that investment will be the leading omnichannel experience in financial services in Australia. I'll hand back to Greg now.
Yeah. Thanks very much, Richard, and thanks Olivia and Ben. As you can see, I think we're very well positioned for continuing growth in BFS. We're a small participant in really large segments of the market. We have a very safe portfolio, the absence of legacy, and I think we have some well, we have the best real technology leadership. So tremendously excited about the future. I'll hand back to you, Sam. Thank you.
Great. Thanks, Greg. Thanks, Tim. So we're going to start with the line first. So we'll go to Matt Wilson from Jefferies.
Yeah. Good morning, Tim. Hopefully, you can hear me, or good afternoon, I should say. S lide 45. The realized losses in the business bank continue to be very low, which speaks very highly of your risk management and relationship-based model approach to business banking. But are there signs of sort of deterioration in application quality? Are your approval rates declining? Are your watchlists changing? Or is it the case that business banking is holding up very strongly in this interesting economy?
Yeah. Thanks very much. Yeah. No, we're really pleased with the credit performance in the business bank overall. We've had very, very few losses in history, and we've not changed our origination standards or our risk appetite over time. We have expanded some of the segments that we participate in very marginally. We do that in an adjacent, very careful way after lots of diligence. So at this point, it's holding up very, very well. There's always some idiosyncratic situations with particular companies or particular clients, but nothing significant and certainly nothing systemic across the portfolio. Obviously, it is tougher conditions for clients, and they're being very careful and responsible in the way they manage the businesses, and our bankers are very proactively engaging with them, but there's nothing concerning at this point.
Thank you.
Great. We'll open up the floor. Jon.
Thank you, Jon Mott from Barrenjoey. A question, if I could, for Greg or Ben. There's an interesting chart you put out where you talked about, at the moment, your home loan market share of the flow is running sort of 8%-10%, but you sort of commented 15% of the low LVR broker flows. You're doing pretty well at the moment in the flow going through. If you look at the market share and the stock of outstanding loans, you're at what, AUD 118 billion? Just over 5%. Share.
If you roll this forward a few years, it would kind of imply that you're going to get to around 8%-10% of outstanding stock of credit or market share. Is that where you'd like to get to, or where do you like to see this business medium-term? Are you a sort of 8%-10% market share player? Where would you like to get that mortgage market share to?
Yeah. Thanks, John. We don't have an absolute target in terms of overall market share. As Ben said and as I think you know from Macquarie, there's lots of businesses we can deploy capital in. So I think we're very well placed in this. As Ben said, we've been recognized four years in a row as the major bank rated by the brokers, and we've demonstrated, in particular months and for longer periods, where the return profile has been there, we're happy and capable of writing a very good amount of business and taking meaningful market share during those periods. But where the economics aren't there, we're happy to sort of pause and stand back a little bit. And so the ultimate size of the business in terms of market share is a function of the economics at the time.
If it plays on the economics are okay at the moment, and if it plays on like this, then yeah, our market share will continue to grow.
And just following on from that, you talk about the economics. Lots of banks define it differently and how they calculate it. So it'd be great to sort of get a feeling for how you work that out. When you're talking about the returns on the mortgage or any of the other businesses, do you look at the yield you're generating? Then how do you transfer pricing? And then how do you look at the costs? Is it pre or post the profit share and tax? How do you actually work out the returns to see if you're getting an adequate return for shareholders?
Yeah. Well, I think the treasury team and Alex's team have extensive work that they do on performance returns across all parts of the business. In our case, we look at all those sorts of metrics, of course. Ultimately, return on equity, which is an after-tax, after-profit share sort of number because that's what's available to shareholders. But we look at the component parts as well in terms of the margins, in terms of the deployment of funds, funding, and so forth, the absolute margins. Alex and the treasury team are very disciplined in terms of the way money is transfer priced out to different businesses as well. So that's factored in. And the other thing that's relevant in our mind is the size of the business relative to its future potential size as well.
A business like the broker mortgage business, of course, we've got a reasonable amount of size and scale there. We're already very efficient relative to market. We can be even more efficient with some of the investments that are still taking place in the technology space, but we'll be even more efficient with more scale as well. So we have an eye to the future as well as we think about returns. The returns are already good in that part of the business, but we think they can get even better.
It should imply that it's a business you want to keep investing in.
Yeah.
Andrew. I'll come to you in a minute. Next, Matt.
Thank you. Andrew Triggs, JP Morgan. Just a question on the cost side of things, Greg. So the chart shows decent cost performance from a long-term perspective, but last year, cost growth was around 20%. Jaws were neutral, and I think you saw 6% half-on-half growth in the first half. Two questions related to that. One, when should we expect to return to positive operating leverage? And two, could you unpack a bit for us the large cost growth last year between replatforming the business bank and what you're doing in wealth versus the regulatory and compliance burden that you've seen?
Yeah. No, we're very focused on the cost side because the more efficient we are, that allows us to make sure we're price competitive with market as well. And ultimately, I think it'll be the most efficient operator with the best customer experience that wins the most market share. So we're very disciplined on the cost structure. You will have seen, and Shemara mentioned it in the overall global numbers, but if you look at the BFS numbers, you will have seen in the last quarter, they've come down by about 200 heads in the last quarter, and that's that roll-off of some of the projects, the completion of certain regulatory and other projects. So we're starting to see, in some areas, the benefits of that investment.
Ben or Richard, I think, might have given the example of the variable rate review, which is a piece of work that we've been working on for many, many months in home loans where now it's completely automated using our tremendous investment in data capabilities. The assembly and the organization of data facilitates this, but some of the machine learning and other tools that we have enable this to be completely automated, this process. And there's a really material efficiency gain in that, and we were able to realize those benefits in this period. And that's just one of many programs like this that deliver that efficiency benefit. So we are expecting to see the jaws open up favorably for us because we are nearing the end of some of the regulatory investment in this part of the business.
As we turn more of our technology spend into the business bank, into the wealth side, that is primarily about efficiency more so than new customer features. So we should really start to see that start to pay off.
Matt, just over in the third row there.
Great. Thank you. Thanks very much, Greg. You talked a bit about the investment in business banking originations. Can you achieve the same sort of growth that you've seen across the home loan lending book, and how aligned are you on deposit funding, and how confident are you that you can grow the deposit base to fund that lending growth?
Yeah. I mean, on the deposit side, as Olivia highlighted, we're really pleased with the deposit growth we've had. I think you gave the example in terms of CAGR growth over the smaller period than the 10 years where the CAGR growth has increased significantly as we've put more effort into that side. You also mentioned the Business Saver account, which is a new product, fully digital, so a very efficient product for us to operate. And the growth there in a very small amount of time with limited marketing has been extraordinary. And you also highlighted the transaction savings account growth in the last year where we had over a 50% growth in that part. So I think the deposit products are leading products, and we are a really efficient operator, well, the most efficient operator when it comes to those digital products.
So we're really confident about the deposit growth available to us. So I think that funding will be there for us. It is harder to deploy the funding, of course, particularly in business banking because typically, the business arrangements are more involved. Someone refinancing their home loan—I mean, there's a trigger. Perhaps they're moving homes, or they're at the end of that fixed-rate period, or someone they know has spoken to a broker, and they're looking at their rate, and it's time to consider that rate and so forth. And in the home loan market, I think something depending on the month, up to 70% of home loans are originated by mortgage brokers. And so there's an active intermediary market that facilitates that process. There's a lot more involved on the business side. Business arrangements with accounts and security and facilities and so forth are more complex.
Businesses make those decisions less frequently, and it's a lot more effort involved and typically with less intermediary involvement as well. So you just don't see the level of refinancing activity in the business space that you do in the home loan space. Notwithstanding that, in terms of the technology and the readiness, we're ready and able to significantly grow that side of the business. I just think the pace of growth will be slower than what we've seen in the personal side.
Great. If I could just ask a follow-up question. In terms of that you've previously seen very low loss rates coming through the broker. I appreciate you're acknowledging that as a strength, but any thoughts on going forward, whether or not the risk appetite you would look to open that up to grow further?
Sitting right in front of you is the global head of risk, and I'm sure he wouldn't want to see us materially increase our risk appetite unless it was really meaningful opportunity to materially lift our lending without having to really change our risk appetite because we're such a small market participant. There's a big opportunity to dramatically expand that lending base without going down the risk curve or without being the price leader. So we're really well placed there. We haven't had the technology in place to facilitate that level of growth, but that's now coming together.
Great. Well, if you have no further questions, thanks, Greg. Thanks to all our presenters today and for your interest and support. We look forward to catching up soon. Thank you very much.