Well, very good morning, everybody. Welcome to Macquarie Group's Annual General Meeting for 2023. My name is Glenn Stevens. It's my privilege to chair the board of your company and to chair today's proceedings. I note that a quorum is present, so I declare the meeting open. I begin by acknowledging the traditional owners of the land from where I speak to you today, the Gadigal people of the Eora nation, and I pay respects to elders past, present, and emerging. With me here on the stage are our Non-Executive Directors, Rebecca McGrath, Philip Coffey, Nicola Wakefield Evans, Susan Lloyd-Hurwitz, Jillian Broadbent, Mike Roche, and Michelle Hinchliffe. Our CEO, Shemara Wikramanayake, Chief Financial Officer, Alex Harvey, and Company Secretary, Simone Kovacic.
Macquarie Bank Director, Michael Coleman, is also present in the room and present in person or electronically, our Macquarie Bank CEO, Stuart Green, group heads Greg Ward, Ben Way, Nick O'Kane, Michael Silverton, Nicole Sorbara, Andrew Cassidy, and Evie Bruce. It's great to see so many of you in person here in Sydney, just a few meters from our head office. Today's meeting is also a hybrid meeting, that allows us to welcome shareholders who can't be here in person, including from around the world. The order of proceedings is as set out in the documentation. After some brief remarks from me, Shemara will take you through the 2023 results and speak to the outlook for the 2024 financial year.
We'll then hear from Nicola Wakefield Evans, who's seeking re-election to the board today, and Susan Lloyd-Hurwitz, who's seeking election to the board for the first time today. Following that, I'll formally open the polls, and then we'll take a break. We look forward to meeting those of you who are here in person during the break. After the break, we'll reconvene and address the formal items of business that are on the agenda. As has been our custom for a long time, we'll take questions on all matters together at that time. Please note that recording devices, photographic equipment, and mobile phones should not be used during the meeting. The meeting is being webcast live on Macquarie's website, and you'll be able to view a recording of the meeting later today.
Those of you who are attending online can send your questions in starting now by clicking on the speech icon on your screen. We'll address them during the formal business of the meeting. We will try to ensure that all topics of interest are addressed in our responses. We may moderate questions or amalgamate them where there are multiple questions on the same topic. Turning to financial performance, Macquarie Group had a very successful fiscal 23, earning a net profit of AUD 5.2 billion, for a return on shareholders' equity of 16.9%. This was an exceptional outcome achieved by a high-performing management team to deliver for shareholders by delivering for clients. Macquarie's diversification was again evident. Even as some businesses faced more difficult trading conditions, others were able to expand profitably by servicing a growing client base.
The commodities business, in particular, was able to help clients adjust to the largest shock to global energy prices since the 1970s. Shareholders received a dividend of AUD 7.50 per share, 20% higher than in the preceding year. 56% of earnings was returned to shareholders, consistent with long-standing policy on the dividend payout ratio. It's important to note that while last year's record result was partly generated by unusual circumstances, the long-term trend in earnings reflects management's effort over many years in building valuable franchises. The diverse lines of business do have significant autonomy, but they come together around a consistent, robust risk culture and market-leading remuneration and accountability structures. The board believes that unique model will continue to serve the company well, even in more difficult times, as in the past.
Times most likely will be more difficult, at least in the near term. Inflation has so far remained troublingly high in most markets, central banks around the world are engaged in a once-in-a-generation struggle to restore the price stability that was such an important feature of the previous era of growth. For both capital markets and for communities, much hinges on success in that struggle. At this point, interest rates seem likely to stay somewhat higher, and for longer than most people thought was likely only a short time ago, with the associated prospect of weaker economic outcomes. As we go into that period, Macquarie is well capitalized, well-funded, and well-equipped to manage risks and to take advantage of opportunities should they present themselves. Turning to ESG matters, we released our first net zero plan for Macquarie Group last year.
That was the result of extensive work, collating information and analysis right across the businesses to inform judgments as to what sort of targets we should set. That report details also some of the ways in which Macquarie is helping clients in their response to climate change. In that first wave report, we set targets for some aspects of our own portfolio. A second wave report is due later this year. Macquarie has continued to make or facilitate industry-leading investments in many aspects of the energy transition and in emissions reduction technologies beyond the energy space, where it's commercially viable to do so. In doing that, we recognize that there are multiple pathways to net zero, dependent in large part on significantly increased clean energy investment and on technological innovation.
Meanwhile, science-based net zero by 2050 scenarios recognize the need for oil and gas to remain a significant part of the energy mix well into the future. As shareholders would be aware, we've been working hard to uplift our regulatory compliance, reporting, and engagement through a major set of work programs. That work is very well advanced, but it will continue for some time yet. It's demanding, it's costly, and together with more general compliance requirements, which continue to increase, it's continuing to add to the cost of doing business. The board and management are very conscious of those costs, but also of the costs were we to fall short in meeting our regulatory obligations. Improving in this area is a necessary condition for the business' ongoing success.
Turning to remuneration, outcomes reflected the very strong performance of the businesses in fiscal 23 and indeed over a run of years. This year, fiscal 24, that we're now in, will see the full implementation of the new APRA standards on remuneration. As we flagged last year, we've reviewed our processes, they are compliant with the new rules. They're overseen by the Remuneration Committee of the Board, our framework preserves the key features of our long-standing model. Relatively low fixed pay, performance pay based on financial and non-financial contributions, delivered mainly in equity, with long deferral periods and detailed accountability. That maintains the high degree of alignment between management and shareholder interests, which, of course, has been such a feature of Macquarie's arrangements for so long and such a part of the company's success. The remuneration report has more details.
Over the past year, the board has resumed its program of visits to Macquarie's offshore operations, and as we've done that, we've done three visits now since COVID restrictions were lifted. We've been repeatedly impressed by the diversity and the quality of the people that are working in your businesses around the world. We're convinced that a workplace environment that welcomes diversity is a productive one, and we see it in action on the ground everywhere we go. That diversity still comes together, though, around Macquarie's long-standing principles of opportunity, accountability, and integrity, and is supported by a strong central risk management process.
That culture is key. With our employee count now numbering over 20,000, and with about half of those people having joined the company just within the past 3 years, doing all we can to ensure that our employees are invested in that culture is very much on the minds of the board and the management. We monitor, as well as doing our visits, we monitor many indicators of culture and behavior, and a number of those are reported in the annual report. The Macquarie Group Foundation provides social impact work for the group, supporting its people, its businesses, and our communities to build a better future. The foundation supported 2,500 nonprofits over the past year to the tune of AUD 52 million. Over AUD 570 million has been contributed to philanthropic causes by the foundation and Macquarie employees since 1985.
Just one example of that work, is its efforts to support its workers, supporting efforts to break down barriers to employment. Last year, the foundation provided White Box Enterprises with a philanthropic grant and a social impact investment in support of payment by outcomes, a 3-year trial to support 170 people who live with a disability into employment with one of 15 jobs-focused social enterprises that are participating in the trial. That's just one example of the sort of work the foundation does. Turning to the board, we were delighted to welcome Susan Lloyd-Hurwitz as a group director, effective, first of June. As shareholders would know, Susan was the highly regarded CEO of Mirvac, until earlier this year, and she brings over 30 years of global investment and real estate sector expertise.
She's also a Macquarie alumnus, earlier in her career, having started various Macquarie funds in the Asia Pacific in the early 2000s. I'm pleased as well that Nicola Wakefield Evans, our longest-serving director, is seeking renomination today so as to extend her term into 2024. That will maintain near-term continuity, while also facilitating managed turnover on the Board. We've continued to develop the support for the Macquarie Bank Board, as opposed to the Group Board, as it meets its obligations to the particular interests of Macquarie Bank. I'm pleased to announce today that, effective 27th September, and subject to completion of necessary regulatory approvals, Mr. David Whiteing will be appointed as a non-executive director of Macquarie Bank Limited.
Alongside Ian Saines and Michael Coleman, David will be one of 3 bank-only non-exec directors and will contribute to strengthening the voice of the bank within Macquarie Group. He brings over 30 years of experience in leading businesses and technology strategies across multiple sectors through numerous periods of change. He's worked globally, including 4 years as a global COO for Standard Chartered Bank in Singapore, various consulting roles in London, and 5 years as a group executive at the Commonwealth Bank of Australia. That's another very strong appointment for us. It remains for me, only on the board's behalf, to thank Macquarie's management and staff for their efforts in again delivering a record result through a time of considerable uncertainty. This team, led by Shemara, continues to grow a remarkable set of businesses that are well-positioned for the future. Fellow shareholders, that concludes my opening remarks.
Thank you for your attention and for your support of Macquarie. I now invite Shemara to discuss the results in more detail and to update you on recent performance. Thank you.
Thanks, Glenn. Good morning and welcome everyone, from me as well. As Glenn mentioned, I will take you through our 2023 result for that financial year and talk a little bit about the update for the 2024 financial year. Before I go into that, I did just want to take a moment to reflect on the fact that 2023 was our 54th straight financial year of profitability.
Not only were we profitable, but we're very pleased that you can see there in those columns, the four columns on the left, that in all the four major indices in which we've been included, both since listing and over the last 10-year period, we've been first, second, or third in terms of total shareholder return that we've been able to deliver, and particularly in the MSCI World Banks Index, we've been first over both of those periods. Turning to the 2023 financial year result, as Glenn mentioned, we had a result of just over AUD 5.1 billion, which was a record result, and it was up 10% on last year's record result for the 2022 financial year.
It was a return on equity of 16.9%. We were also pleased that the board was able to increase the dividend by 21% to AUD 7.50 a share for that year. The contribution, again, as Glenn mentioned, came from different parts of our businesses. We have four main operating groups, and they're all exposed to different drivers, and that gives us very good diversification through cycles in terms of the resilience of the earnings we're able to deliver. Last year, the earnings from those operating groups was up 9%, the net profit contribution from them, and there was a mix of which businesses performed strongest and contributed the most in that period. The annuity-style businesses, which are our global asset management business and our Australian banking financial services business, had mixed contributions.
Banking and financial services continued to grow very resiliently, the earnings in that business were up, whereas in the asset management business, they were down on the previous year, principally because we had some large one-off gains in that year from asset realizations. Over to your right, we have our two market-facing businesses, which are Macquarie Capital, a global business that provides advisory and capital market solutions, advice, and also principal investment. In that business, the earnings were down because the 2022 financial year was a very strong year for activity levels, relative to that, it was down. The realizations in its investment book were down slightly, even though it continued to grow its private credit book.
The area that contributed the biggest amount last year was our Commodities and Global Markets business, where we had solid contributions from the asset finance and financial markets business. The commodities business particularly was able to deliver strong results from the high activity levels, particularly given the volatility in the energy sector. I would stress that the diversification positions the overall Macquarie portfolio well through all cycles to be delivering. Not only do we have that diversification by businesses, but regionally we're also well diversified now. Australia, where we began our business 54 years ago, is today 29% of our earnings contribution, and we have large contributions from the other 3 geographies: the Americas, Europe, Middle East and Africa, and Asia today as well. Again, good diversification. I'll briefly go through each of the 4 businesses, over the last year.
Starting with Macquarie Asset Management, you can see in that circled number, the circle down there, it contributed 23% of our net profit from the groups last year. That result, you can see in the dark green boxes, was down 23% on last year's result or the prior year's result, at about just over $2.3 billion. Mostly down, as I said, because we had material realizations in one of our US-listed infrastructure funds and also in our green energy assets.
The underlying business in the column headed Private Markets, you can see that the assets in that private markets business was up 30% on the prior year, including being driven by a record capital raising of AUD 38 billion, just over 38, which left us with close to AUD 35 billion of capital deploying as we go into this new financial year. The public investments, which is principally fixed income equities, the assets were slightly down. Equity markets came off a lot during that financial year and drove that, but we also had slight negative impact from net flows offset by foreign exchange gains. Turning to the banking and financial services business, that contributed 12% of our net profit from the operating groups last year, as you can see circled there. That was up 20% on the prior year to AUD 1.2 billion.
We had really good growth, ongoing good growth across that business. As you know, it's a customer experience focused digital banking offering, and over the last 10 years, we've had really good growth in our home loans, our business banking, et cetera. Home loans last year, up 21%. The business banking book up 13%. That was supported by the deposit growth, which was up 32%, and our funds on platform also grew. Good momentum behind that business as well as we move forward for the reasons that have driven it to date. Turning to the Commodities and Global Markets business, you see in that circle there, it was our largest contributor last year, contributing 57% of our net profit from the operating groups.
It was up 54% on what was already a large record result the year before, delivered just over AUD 6 billion. That was driven from all three divisions in there. The asset finance business continued to deliver positive performance. The financial markets business also grew across foreign exchange, interest rates, futures, equity derivatives. The really big step up was in the commodity markets, where we were able to deliver a lot of client service across a range of classes, gas and power, global oil, resources, et cetera. We also had strong inventory management and trading results, particularly in North American power and gas.
Macquarie Capital contributed 8% last year of our net profit from the operating groups, and that result was down 47% to AUD 800 million, because as I mentioned, we had much lower activity levels in the areas where Macquarie Capital provides services globally, and so fee and commission income was down. We also had slightly less realizations in terms of equity investments, but we had good growth in the private credit book, which is providing good annuity income there. It's up to AUD 18 billion now, having invested another AUD 7 billion over that last year. That was the contribution from the businesses.
If we look over the medium term in terms of the returns that they've delivered, you can see I mentioned at the bottom of, in the middle column there, you can see 16.9% return on equity this last year, and over the last 17 years, an average of 14% return, which is good compared to peers in our sector. That was after holding surplus capital of AUD 12.6 billion. Prior to that AUD 12.6 bill, the underlying groups delivered at the top, you can see, over in the two columns to the right, the annuity style businesses have delivered 22% on average over the last 17 years and 18% in the last year. The market facing 17% on average over the last 17 years and 28% return in the conditions they had last year.
The underlying businesses continuing to deliver very good return on equity, and even after the prudent surplus capital we hold, the overall group delivering a good result. That was done with a strong and very prudent funding and capital approach. In the middle, you see there the AUD 12.6 billion of surplus capital I mentioned we finished the year with. Our bank had a 13.7% CET1 ratio. These are strong numbers, and our term funding comfortably exceeded our term assets. We're very well positioned in terms of any liquidity issues. Our credit ratings, we were A-rated by all the three major rating agencies, Standard & Poor's, Moody's and Fitch, with Moody's having upgraded us indeed, in May of this year.
With that, I'll look now at an update on the 2024 financial year. We're experiencing very different conditions as we go into this year. As many of you may be aware, weaker trading conditions over the Q1 of this financial year meant that the contribution from our operating groups was substantially down on what was a very strong prior comparable period. The Q1 of last financial year, we had some very strong results. First, looking at the annuity style businesses, our Banking and Financial Services business contribution was actually significantly up on that prior comparable period as we continue to grow our books and deliver to our customers and our customer base and invest in our digital banking offering.
The asset management result was down substantially, and that was principally due to lower investment related income in our green energy investments, where we had some strong realizations in the Q1 this year and didn't have that repeat. In the market-facing businesses, the contribution there as well, combined with substantially down on the prior comparable period. In Macquarie Capital, that was because our fee and commission income was down on the prior period because activity levels were a lot stronger a year ago, and also we had fewer material realizations. The area that was down in terms of Commodities and Global Markets, was the commodities business, where we saw much less activity, particularly the Q1 last year, was a very strong period.
Looking at some of the features of those four businesses, the Asset Manager finished the Q1 with its assets broadly in line with where they were at the end of last year. We had about AUD 2.1 billion of new investments into our funds that were closed and locked in. We ended the period still with a strong dry powder, and in our public investments business, we were slightly up on our assets under management. That's a fixed income and equity, and that was driven heavily by markets recovering a lot in the Q1 of 2023. We also had some offset there from net flows. The Banking and Financial Services business, I mentioned the growth in all the books there last year.
This year as well, we continued to have growth with the mortgage book up 2%, business banking portfolio up 8%, driven by our deposits, which came off slightly as the competition levels caught up with where we were in the deposit markets and our funds on platform were up 4%. In the Commodities and Global Markets business, as I mentioned, the Asset Finance and Financial Markets continue to deliver strong results, particularly in Financial Markets, where we saw strong activity levels, particularly in foreign exchange. In the Commodities business, we were significantly down on the prior corresponding period, and that was largely driven by reduced trading activity, particularly in gas and power.
In Macquarie Capital as well, we saw lower fee and commission income due to the lower activity levels, the fee revenue was down on the prior comparable period, as were the asset realizations offset by the private credit book continuing to grow. In terms of our financial position at the end of the quarter, it remained strong, with our term funding comfortably exceeding term assets still. We raised about another almost AUD 3 billion of term funding over the quarter, and our deposits end up strong, still at about AUD 134 billion. Our capital, the main thing that has happened in terms of the change in our capital, as I mentioned, we've had AUD 12.6 billion of surplus capital. That dropped to AUD 10.8, principally driven by the second half dividend of AUD 1.8 billion that we paid.
That was the main change in capital, and we note there again, that we did have a credit rating upgrade from Moody's after the financial year. We didn't see a lot of capital absorbed into the business, the middle column there, the dark green one, shows where we ended the last financial year. It's broadly net flat over the Q1 , where we saw capital continue to be absorbed in banking and financial services, in growing our home loans and our business banking books. Macquarie Capital did some equity investing as well, but that was offset by a reduction in credit risk capital in the commodities and global markets as we had lower commodity price and exposures. We finished the year again, or the quarter, apologies, with strong regulatory ratios.
There you can see well above the dashed blue line being the APRA Basel III minimums that we're required to hold. For example, you can see the second in from the right, our Liquidity Coverage Ratio is at 211% compared to 100% minimum. Speaking of the APRA regulatory environment, you can see a long list there, half a dozen things that we've noted that APRA is working on in terms of ongoing building resilience of the sector. We are partnering constructively with APRA on that, and the bottom bullet point there in the Australia section, we're also working with APRA constructively on a remediation plan in relation to the governance, culture, remuneration, et cetera, of Macquarie Bank Limited, to strengthen the voice of the bank, and that's an ongoing program.
In relation to Germany, we update every quarter on what's going on there, and there's no update to the disclosure since the one that we made at the end of last financial year. With that, I'll turn to the last thing I'm going to cover, which is the outlook for 2024, the rest of the financial year and the full financial year. Again, we'll look at this by each of our four operating groups, starting with Macquarie Asset Management. There, we're expecting the base fees to be broadly in line, but the net other operating income, we think, will be substantially down on last financial year because we did have very material realisations in the Green Investment Group. As I mentioned, they were quite front-ended.
The first half last year, our result was weighted quite strongly to the first half with the sort of realisations and activity levels we saw. This year, some of the realisations are more back-ended. In the Banking and Financial Services Group, we're seeing growth in loan portfolio deposits, platform volumes, as I mentioned. The results there will be driven by market dynamics, which will continue to drive margins, and we're also continuing to invest a lot in terms of the growth in the volume, the technology investment, which I think, Greg Ward's in the front row here, but I think it was a quarter of a billion last year that we invested in trying to stay ahead with our digital offering for customers and also in compliance and regulatory requirements.
Macquarie Capital, we think the transaction activity will be up on 2023, because that was a very challenging year and quiet activity levels, so fee and commission income should be up. The investment-related income, we think, will be broadly in line, with increased revenue coming from the growth in that private credit book. It grew to $19 billion over the Q1 , so up another $1 billion, but lower realizations in our equity positions just due to timing. We realize the assets at the point at which we think we'll get the best return for the capital that we've put in, so we manage the timing on that basis. Our Commodities and Global Markets business, consistent contribution expected from the financial markets and the asset finance, but the commodities income, which was particularly strong.
benefited last year from the exceptionally strong market conditions, trading conditions, volatility. We think this year we expect it to be broadly in line with the prior year, the 2022 financial year. At the corporate level, our compensation ratio and our effective tax rate, we think will be consistent with historical levels. I should mention that that short-term outlook, as ever, remains subject to a range of factors. Market conditions, including global economic conditions, inflation, interest rates, volatility, and the impact of geopolitical events could have impact. Also, the completion of period-end reviews and the completion rate of transactions, and ongoing geographic composition of our income, foreign exchange implications from that, and lastly, regulatory and tax changes.
Given that, as you see, we continue to maintain a cautious stance with a very conservative approach to our capital, our funding, and our liquidity, which we think positions us well to respond, particularly in the current environment, but more generally through the cycles. Over the medium term, as Glenn has also mentioned, we think we remain well-positioned to deliver superior performance, and that's because, as I mentioned, we have deep expertise across four very diversified business lines, which are exposed to different drivers and which are positioned for structural growth and gives us a good runway to keep organically growing those businesses. That's the customer-focused digital bank, as I mentioned, the global asset manager in private markets and public investments, our commodities, financial markets, and asset finance business, and Macquarie Capital, which is specialist advice in many different markets, capital solutions, and investment.
We couple that, obviously, with our strong ongoing investment in our technology and broader platform, our regulatory spend to support that strong and conservative balance sheet that I've mentioned, very importantly, our proven risk management framework and culture, that does include an approach of patient adjacent organic growth. We think for the medium term, we should be well-positioned to continue to deliver you superior returns for the risk and relative to the peers that we have in the sectors in which we operate. With that, I will hand back to Glenn for the formal business of the meeting. Thank you.
Thank you, Shemara. We'll now move to the formal items of business for the meeting. The notice of meeting and the accompanying explanatory notes have been sent to shareholders. I propose to take those as read. The items of business are as shown on the slide. Item 1 is to consider and receive the annual accounts. I now lay before the meeting, the financial report, the director's report, and the auditor's report of Macquarie for the financial year ended 21st of March, 2023. Please note there's no formal resolution today relating to the financial statements. Item 2A is the re-election of Nicola Wakefield Evans as a voting director. Item 2B is the election of Susan Lloyd-Hurwitz as a voting director. Each director will address the meeting before we break for the refreshments.
Item three is the annual non-binding vote on the remuneration report, which is in the annual report. Included in the notice of meeting of a letter from the chair of the Board Remuneration Committee, and an analysis of how our results are aligned for this year's remuneration outcomes. Shareholders familiar with Macquarie will know, of course, that our remuneration framework is longstanding. It supports our purpose by motivating staff to grow our businesses, identify new opportunities, and be accountable for their decisions, behaviors, and the risk management, customer, economic, and broader consequences of their actions. We believe that longstanding approach to remuneration is a key driver of Macquarie's sustained success as an international organization. Item four is to approve the giving of termination benefits, as set out in the explanatory notes for the notice of meeting, convening today's meeting.
Item 5 is to approve the managing director's annual participation in the Macquarie Group Employee Retained Equity Plan, or MEREP, as we call it. I'll now ask those who asked to hear from those seeking re-election today. Moving to item 2A, that's the re-election of Nicola Wakefield Evans. She's been an independent voting director of Macquarie since February of 2014. She served as chair of the Board Governance and Compliance Committee and as a member of the Audit Nominating and Risk Committees. Her substantial experience as a non-executive director and corporate finance lawyer in Australia and internationally in the financial services, resources, and energy, and infrastructure sector, materially adds to the board's expertise in those areas and to the oversight of Macquarie, and we consider it to be of significant benefit to the company.
Ensuring that the board is an effective shareholder steward for a business as diverse as Macquarie requires balancing experience and longevity with fresh perspectives underpinned by a diversity of expertise. The board has no reservations regarding Nicola's ability to discharge her duties as one of your directors, and so now I invite her to address the meeting. Thank you, Nikki.
Thank you, Glenn, and good morning, shareholders. I'm delighted at the opportunity to speak to you today in support of my re-election as a director of the Macquarie Group. As you heard from Glenn, I am an experienced company director, and other boards I currently serve on include Viva Energy, Lendlease, MetLife Australia, and the Clean Energy Finance Corporation. I'm also a member of the Takeovers Panel and hold board leadership roles in the non-for-profit sector as the chair of the 30% Club Australia, the GO Foundation Board, and the University of New South Wales Foundation Board. In my executive career, I was a corporate finance lawyer working with large businesses across a large range of sectors globally. During this time, I held several key management positions at King & Wood Mallesons in Australia and internationally as Managing Partner, International Hong Kong, and Managing Partner in Sydney.
These experiences, together with my years served on the Macquarie board, to date, I believe, contributed to my ability to provide meaningful perspectives on the group's operations in Australia and globally, and to help guide its governance, culture, and purpose. The time I have committed to my roles as chair of the Board Governance and Compliance Committee, and as a member of the Board Risk, Board Audit, and Board Nominating Committees, have reinforced for me the importance of prudent risk management to support the company's continued success. Following a period of board renewal in recent years, I hope to provide some near-term continuity by serving shareholders during my remaining tenure, which, as Macquarie announced in May, is expected to conclude next year. Thank you very much for your support.
Thank you, Nikki. Item 2B is the election of Susan Lloyd-Hurwitz, having been appointed by the Board as an Independent Voting Director on June first this year. The Board will benefit from her significant global investment and real estate sector expertise, with over 30 years of experience in that sector. Most recently, having served as Chief Executive and Managing Director of Mirvac for more than a decade. Since her appointment, Susan's been a member of the Board Nominating Committee. The Board has no reservations regarding her ability to discharge her duties as one of your directors. I take pleasure in inviting Susan to address the meeting. Thank you.
Thank you, Glenn. Good morning, shareholders. It's a privilege to be speaking to you today in support of my election as a Director of Macquarie Group. As you heard from Glenn, my background is in the built environment sector. Most recently, I had the absolute privilege of leading Mirvac as its Chief Executive Officer and Managing Director for over a decade. I've also served as Managing Director in Europe of LaSalle Investment Management, held various senior management roles at Macquarie Group, MGPA, and Lendlease in Australia, the U.S., and Europe. I was previously National President of the Property Council of Australia, Chair of the Green Building Council of Australia, and a Director of the Business Council of Australia.
These roles equipped me with a deep technical experience in the global investments and real estate sector, honed by more than 30 years of experience in Australia, Europe, and the U.S. Earlier this year, I became a non-executive director of Rio Tinto. Currently, I'm president of Chief Executive Women, chair of the Australian National Housing Supply and Affordability Council, a member of the INSEAD Global Board and the Sydney Opera House Trust. I believe I have the skill set and deep expertise in business and in relevant industries internationally to complement the skills and experience of other board members. I see my role as one where I contribute to the board's oversight of Macquarie's diverse global operations and support its ongoing success. As a director of Macquarie Group, I'm confident I will have sufficient time and commitment to serve you, the company, and all shareholders.
Thank you for your support.
Thank you, Susan. To allow everyone attending an opportunity to vote, I now open the polls in respect of all the motions that shareholders will vote on today. Polls will remain open until just before I close the meeting. Shareholders and proxy holders participating online can cast a direct vote by clicking on the bar chart icon. Select the option corresponding with the way you wish to vote. Once the option's been selected, the vote you selected will change color, and a confirmation message will appear. There's no need to press, submit, or send. Your vote is automatically counted. To change your vote, select another option to override the previous choice. Shareholders and proxy holders attending in person have been issued with a handset at registration in order to cast your vote.
To do so, use the scroll wheel to highlight the resolution that you want to vote on, then press the green square button. Once you've confirmed the resolution, press the green square button again to see the voting options. To vote for the resolution, press 1. Against, press 2. To abstain, press 3. Press the green button to move on to the next resolution or the red button to return to the full list of resolutions. To change your vote, select another option to override your previous vote. Your votes can be changed or canceled anytime until I close the polls. Representatives from our registry are here today, and they're available to assist you if you have any questions about how to vote on the handset. Proxy holders with directed votes will have those votes automatically voted as directed.
All open votes will be voted according to the option you see via looming or on your handset. I'm now going to adjourn the meeting for a half hour or so to allow those attending in person to have a break for refreshments. We look forward to meeting some of you during that time. We'll reconvene in about half an hour. If you have a handset and you don't intend to return after the break, could you please leave the handset with the staff at the registration desk? For those online, a notification will appear on your screen prior to the meeting recommencing. We adjourn for 30 minutes or so. Thank you.
Attention, everyone. Just a reminder, if you could please take with you your handset and your share registration cards, you will need them with you to return to the room. Thank you.
We founded PhilTower in 2019, just at the follow-up of the liberalization of the mobile market. We're one of the first independent tower companies to be registered in the Philippines in 2019. We build infrastructure, shared infrastructure for mobile operators.
We started working with our partner in Philippine Towers as early as 2021. What we contribute to the partnership is the experience of Macquarie Capital, not just in the digital infrastructure space, but in infrastructure in general. What excites me about PhilTower on a personal level, is to see fellow Filipinos now enjoy seamless and reliable-
We came in in the second half of 2021, injecting a first round of investment of AUD 31 million, which was continued and complemented in the middle of 2022 with another AUD 14 million to help fund our expansion and grow our portfolio. That would not have been possible for us to win that sell and leaseback contract without the tremendous help that has been created throughout the whole team, not only the team who interact directly in Singapore and Macquarie Capital, but also the core team in Sydney, who helped us raise equity and debt in the tune of AUD 400 million.
Early on, we realized the strong potential and opportunity of digital infrastructure in this part of the world. We're starting to build a business. It's of course, a very excited about where we will be able to bring this business in the future.
To the mobile operators in the Philippines, maintaining that pioneering spirit that got us here in 2019, while continuing delivering on the operational excellence that has become the trademark of PhilTower, thanks to the Macquarie Capital investment.
Commodities and Global Markets has been facilitating solutions for our clients to help meet their net zero and broader sustainability goals. As part of our approach within our existing client base, we've seen an increase in demand for and supply of responsibly sourced gas. Responsibly sourced gas, known as RSG, is essentially natural gas produced by companies whose operations have been independently verified as meeting certain environmental, social, and governance standards. Pacific Canbriam Energy is a leading natural gas exploration and production company in Western Canada. Énergir is Quebec's leading natural gas distributor. Macquarie led a syndicate of these top energy market participants to facilitate basically the purchase and sale, transportation, and delivery of RSG. Macquarie also arranged the delivery and retirement of the associated RSG. These RSG certificates are held with expansive. That's what makes this transaction so special, is use of a digital registry.
This digital registry issues, tracks, and retires the certificate using a distributed ledger technology. The use of the digital registry raises transparency standards across the entire value chain of gas procurement transactions. Almost simultaneously, Énergir had committed to sourcing 100% of their gas supply as RSG by 2030. At the same time, Pacific Canbriam became certified for their sustainability practices and achieved their RSG certification. Both of these companies were already existing clients of ours. We were able to leverage our strong relationships with both of them to link up Pacific Canbriam supply of the RSG and Énergir's demand for the RSG. This was the first known transaction of its kind. It definitely was not the last. Our relationship with Cambrian in particular, has continued to grow. We have since executed multiple RSG transactions with them.
This transaction has also opened up opportunities to expand our RSG offerings to other clients.
Welcome back, everyone. I now reconvene the meeting. We'll continue with the formal business. Just a reminder that the polls remain open. Let's now move to take questions and comments. Of course, it's my duty as chair to ensure that, so far as we can, a reasonable opportunity is afforded to everyone to ask questions about or to comment on the management of the company, the remuneration report and the other items of business before the meeting today. To achieve that, we have adopted some procedures that are set out on the slide here. We're committed to ensuring that people attending feel safe and respected at all times. That includes ensuring that the meeting is conducted in an orderly way. We've come today to discuss matters of interest to shareholders as a group.
Those participating online can submit a written question or comment through the learning platform at any time during the meeting until the end of the Q&A session. To submit a question or a comment, select the messaging icon and compose your question or comment. You can submit more than one question, and you'll receive a confirmation that it's been submitted. Question can be combined if there are multiple questions on the same topic. We'll also respond, of course, to questions from shareholders participating online who'd like to ask a question. To do that, click on the Request to Speak button at the bottom of the broadcast window and follow the prompts. Please wait to be called to ask your question. Members in the room who wish to address the meeting can do that by pressing the microphone button on the handset, followed by the green square button.
When you reach the front of the queue, we'll call your name, and invite you to address the meeting. You can leave the queue at any time. To do that, press the microphone button and then the green square button. We're going to start with questions submitted in advance and then take turns through written questions submitted online during the meeting, questions from members here in the room, and audio questions. You're welcome to ask 2 questions at a time, and then we'll give other shareholders the opportunity to ask questions before returning to members who have more than 2 questions. You can ask more than 2, but just 2 at a time.
To address as broad a range of topics as we can, we might defer to later in the meeting further questions on a particular topic if they've already been covered on a via a number of other questions on that topic. If you have a customer issue or other matters that don't relate to items of business on the meeting schedule today, our investor relations staff are here and be happy to take your query, or you can email them at Macquarie.shareholders@macquarie.com, or you can see a staff member at the shareholder table outside the meeting. I note that Mr. Sam Hinchliffe from PricewaterhouseCoopers, the external auditor, is present at today's meeting. He's available to respond to questions relevant...
The preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements, and the independence of the auditor. There were no external pre-written questions for the auditors received prior to the meeting. I'm now gonna take questions that were submitted in advance.
Chair, our first question comes from Dixon Dickson. The question is: What is the chairman's outlook on the world's economy and its implications on Australia's economy?
Very briefly, Dixon, I think the outlook for the world economy is still quite challenged. Inflation is too high. It is coming down. It needs to fall further, and the central banks, as I said earlier, are in a once-in-a-generation struggle to make that happen, and we have a lot riding as a community and as capital market participants to know whether they've done enough or not. I think markets will remain a little bit volatile while all of that unfolds. I think that's the near-term outlook, and I think that's probably the same in Australia, actually, for the period just immediately ahead. Next question, please.
Chair, our next question is from Dixon Dickson Group.
It takes a lot of hard work. No, seriously, this company is looking for people who want to come to work for us and who are interested in aligning with the principles that we operate under. That's opportunity, accountability, and integrity. If you're up for those, you've got the requisite skill set, there's probably a job here for you, and, you know, that's the opportunity. Grab it. Next question, please.
Chair, our next questions are from Andrew Thomas Punch. They have two questions, which are as follows. Question one: There is a rumor that the requirement for employees to work in the office 3 days a week is to prop up Macquarie's property investments. Is Macquarie basing its employee relation policies on its property investments? Question two: How is the requirement of working in the office 3 days a week affecting recruitment and retention of top performers and Macquarie's diversity and inclusion goals, particularly for parents and neurodiverse people?
Well, Andrew, I haven't heard the rumor that you claim there is that we're doing that, there's no truth to the idea that we are driving return to office policies in order to preserve property values. The property values of the assets we own, they're evaluated under standard criteria and in accordance with the accounting standards. That's how that's done. As for return to work, well, local management around the world is empowered to make these decisions based on what's best for their team, for the company, and for the team members in that jurisdiction and under the circumstances they face.
We do think that collaboration is a powerful force for innovation, and that is why it is good to spend at least part of the time at the office, and we very much encourage people to do that. That's done in quite a decentralized way because COVID experience was different around the world. Businesses are different in different jurisdictions and locations, and their needs are different, and so we allow the local management to make those calls, subject to achieving the company's objectives. I'm not aware of any suggestion that that has had a deleterious effect on retention. I think retention is going quite well, and I think most people who are coming back to the office are actually enjoying the experience of being back together and the innovation and opportunity to collaborate that brings.
Next question, please.
Chair, our next questions are from Peter Caloyero. They have 2 questions, which are as follows. Question one: Does Macquarie use ChatGPT or other AI generative programs, and if so, what are the benefits to Macquarie's businesses? Question two: Can Macquarie see any risks to any of its divisions of competitors or customers ramping up their spending on ChatGPT or other AI generative programs? Does Macquarie employ any prompt engineers in its businesses?
I'm going to ask Nicole Sorbara to address some of the detail there in a moment. I'd just say that at the board level, we're following the AI, and especially generative AI, issues very closely. The company is looking at all these things. We have a very careful approach, and we're very cognizant of the risks, and the opportunities, and those two things have, of course, to be kept in balance. Perhaps, Nicole, you could speak to some of the details. Thank you.
Will do. Thank you, Chair. As Glenn said, we are currently experimenting with some pilots around generative AI, and we're taking a very measured approach. We're quite excited about the opportunity, but we see the opportunity at the moment is more one around productivity and helping our people be more productive in their roles, rather than at the moment it being about replacing whole roles. We have set up guardrails in place. We have defined standards. We are running a set of pilots, and they're called co-pilots, across the Group, where we are still requiring humans to review and to be actively involved. But where we're seeing potentially productivity savings is...
I'll give you an example, the GitHub Copilot, which we're rolling out at the moment across thousands of software developers, that will help them be able to write code faster. Just answering the last part of the question around prompt engineers. That skill or that discipline, we don't call it as a specific discipline at the moment, but it's essentially about how you define and then redefine the questions that you ask generative AI. We're essentially starting to do this through the work we're doing in our co-pilots at the moment, it's something as generative AI matures, we may see as a specific discipline going forward.
Thank you, Nicole. Could we have the next question, please?
Chair, our next question is from Stephen Mayne. The question is: As was discussed at last year's AGM, Macquarie has borrowed AUD 11.3 billion from the Reserve Bank through its Term Funding Facility on a three-year deal at a fixed rate of 0.1%, which is repayable on June 30, 2024. Is it our intention to wait until the end of June to repay that facility, given then an AUD 11.3 billion loan at the current official RBA rate of 4.1% would cost AUD 463 million a year in interest, or AUD 1.27 million a day? We will only pay AUD 34 million in total over the three-year term of the loan.
CFO Alex Harvey mentioned last year that Macquarie had extended another AUD 3.7 billion in mortgage credit and AUD 2.5 billion in small to medium-sized businesses loans since the RBA loan was taken out. Is there any update on these figures, and will they have to call in some of the loans when the AUD 11.3 billion is fully repaid?
No, we won't. Sorry.
How much money does Macquarie currently have on deposit with the RBA, and what rate of interest is our central bank paying us?
I'm pretty sure we won't have to call in any mortgages, Alex, but I'm gonna go funding issues are for you.
I can confirm that, Chair. Thanks, Stephen, for the question. Yeah, just a couple of points, I suppose, in response. Firstly, yeah, it is our intention to repay the AUD 11.3 billion at around the 30th of June, 2024. As you know, that facility was extended by the RBA at a difficult time. In fact, the facility was put in place to encourage lending, both to the mortgage market, but also to small and medium enterprises. That's what we did, and in fact, it had an incentive to actually extend credit, particularly to SMEs, to enable them to continue to operate through a difficult time. We've been able to do that, and really pleased to do that.
I mean, as you know, in terms of the results to March 2023, you know, the BFS mortgage book grew, I think, point to point about 27%. That was a really strong year of growth from a mortgage perspective. The small and medium enterprise part of that business grew at 13%. We've continued to be able to extend credit to customers all over Australia, which we're obviously very pleased to do. In terms of, as I said, in terms of repayment, we certainly won't be requiring any of our mortgage holders to repay their mortgages on the back of us refinancing the RBA facility. As you know, we have a broad range of financing sources.
We run a very conservative funding profile, and Shemara talked about that in her presentation today. In fact, we're well in front of that repayment profile, particularly with the work that Greg and the team have done to expand the deposit products we've got in the marketplace. We're really pleased about where the balance sheet is positioned. In terms of the ESA balances, which I think is the other part of the question, we obviously don't disclose our own ESA balance, and it moves around from time to time in any case. Across the whole sector, if you looked at June 23, the ESA balance, Exchange Settlement Account balance with the RBA was a little over AUD 400 billion across the entire market.
In terms of the rate of return, as I know you're aware, Stephen, you get the cash rate less 10 basis points, so about 4% on those ESA balances. With that, Glenn, I'll hand it back to you.
Thank you. Thanks, Alex. The next question, please.
The next question is from Craig Edward Corfield. The question is: Macquarie's bank share of the Australian property loan market has increased 1,000% over 10 years. This contrasts with ANZ, who have seen their share of the loan market decline from around 15 to 13%. If these trajectories continue, Macquarie could have a larger share of the Australian loan market than ANZ's. What is Macquarie doing differently from ANZ, and did Macquarie consider at making a takeover offer for Suncorp?
Well, there's some operational questions there, Shemara, for you, but that record sounds like a record of a growing presence in the market, and success on our...
Yes, of course, thank you for that question. I mentioned that we've grown our mortgage book to 5% of the Australian mortgage market over a 10-year journey. It's been a very patient, adjacent growth, and it continues. The majors, you mentioned ANZ there, have multiples of our share of market, and we're not taking share from any one major. We're focused on bringing this digital banking offering to consumers and winning patiently, adjacently, slowly, market share doing that. And I think, Greg is here and can add comments if he wants to, but that's the journey we plan to continue to go on. We're 5% of the mortgage market today. We're less than 1% of the business banking market, and we see long runway for patient, adjacent, organic growth.
In terms of acquisitions, we haven't felt the need to do that. Clearly, when you do an acquisition, you have to integrate. Are investing a lot in our really state-of-the-art digital network, so that the platform we have is really tailored to be nimble and keep evolving. We're comfortable continuing on this patient, adjacent, slow, organic growth journey in our banking business. Greg, I don't know if you would like to add anything, because it's really Greg and his amazing team and the central service groups driving this.
Nothing to add.
Okay. Next question, please.
Chair, our next question is from John Sabljak. The question is: Currently, Macquarie credit card customers can only pay bills on the day they access their account. Could the CEO please advise when it is expected that all credit card customers will be able to pay bills for a future date? This functionality is currently available from your competitors.
Greg, I might have to pass to you on that one. Thank you.
Yeah, no, we have that functionality on the credit card product. There's a red little icon that you go to, which is Pay, and then you can nominate a future payment date. That's if it's coming from a Macquarie account. If it's coming from an external bank account, you can use BPAY and in that bank's application, nominate the future payment date. I think maybe we get the shareholder's contact details, and we can have our client service team assist.
Yep. Okay, thank you. Next question, please.
Chair, our next question is from Craig Edward Corfield. The question is-
...My mother has a reverse mortgage with Macquarie-owned RMS on a very low 20% LVR. The interest rate is an extraordinarily high 9.55%. Why does Macquarie charge so much more to pensioners when the low lending ratio reduces Macquarie's risk? Isn't this an example of Macquarie chasing the holy dollar, price gouging pensioners, and one reason why Macquarie was found deficient in their reverse mortgage operations by regulators? Given accountability is one of Macquarie's three key values, how many reverse mortgages has the auditor, PwC, looked at on a granular application form level? How many reverse mortgages did PwC find to have deficiencies?
Mr. Corfield, we don't normally go into detail on particular customer issues at the AGM. There are people here who can help you deal with that issue. I'm not aware that we were found deficient by regulators, and in the case you reference, that has been the subject of a complaint to the relevant body, who found in favor of Macquarie in 2021. I don't think I can give you any more than that today. Can I have the next question, please?
Chair, the next question is from Stephen Mayne. The question is: The U.K. water industry is currently in a debt crisis, with talk of nationalization amidst various environmental and performance problems. The Guardian newspaper published a lengthy business feature on Macquarie's involvement on July 10 this year, in which it reported that debt at Thames Water rose from GBP 3.4 billion to GBP 10.8 billion during the Macquarie consortium ownership from 2006 to 2017. During the same 11-year period, The Guardian claimed Thames Water was paid dividends of GBP 2.7 billion to shareholders, including Macquarie. Could Shemara please comment on the role she played in the Thames Water investment and whether she is concerned about recent developments?
Could Chair Glenn Stevens advise if the board has sought any independent review of Macquarie's investments in the UK water sector? Given our ongoing enormous investment in UK infrastructure, is it perhaps time to diversify our Sydney-focused board and appoint at least one UK-based independent director?
Even though I think I'll begin here and then hand to Shemara. It's important to note that, notwithstanding the rather one-sided commentary in some of the UK media, the Macquarie period of management of that asset was from 2006 to 2017. During that time, investment in the utility increased. It was three times the level previously. Leakage went down, security of water supply went up, and customer bills remained amongst the lowest in the UK. Actually, Macquarie is quite proud of the role that our management of that asset played in that period, which of course ended six years ago, a long time before the current problems that are in focus again. Shemara, do you want to perhaps add to that?
I guess, Mr. Mayne, first I'll just clarify a couple of things, because, it's not actually the UK water industry that's in debt crisis, it's Thames Water specifically, that is having high levels of debt. As Glenn mentioned, Macquarie hasn't been involved with Thames Water for 6 years. Macquarie owned it for 11 years prior to that. Also, the asset is not a Macquarie asset, so I think it's really important to understand that it's in an asset in our European infrastructure funds, in which the investors are pensioners, insurance companies, and our asset management team manages that on behalf of those investors and has to make sure it's doing the right investments. That team, but it's not really up to the Macquarie Group board or Macquarie management to direct them in what they do.
They have to take into account the interests of the investors in those funds. They do, and they do it admirably. It's our job to make sure they're high-quality people, but ultimately we don't invest in interfering in individual asset investments. As the chairman said, we owned Thames for 11 years until six years ago, and the debt levels did increase. Not the level you said, about $5 billion, as with your own debt, you'd know you have to look at debt in the context of the value of your assets and your earnings. The Thames Water debt always stayed investment grade, well above what the regulator required under the license. It shows that the debt levels, as with all the assets we manage, we maintain prudent debt levels for the asset.
Importantly, as Glenn said, we also, we invested GBP 11 billion over our period of ownership. That was about GBP 1 billion a year. With that, we were able to. The investment was 2.5 x what it was in public ownership. We were putting a lot of asset money into the asset. We reduced leakages by 22%. We still kept the water rates at the third lowest level for the customers there. We were very proud of what we did with the Thames asset, or our asset management did. The distribution to equity, you said, was GBP 2.7 billion. That was actually distribution from the operating company to the holding company, which is where the fund owned the asset.
There was debt at that level as well, so equity only got GBP 1.1 billion out of that, which over the 11 years, it was about GBP 100 million a year. That was a 5% payment to equity. That's a reasonable return for the pensioners and insurers whose money goes into these assets for the risks they take, et cetera. Equally, debt was funded out of those payments. I would say all our people are proud of what they were able to deliver for Thames Water. I think it's really important, though, to understand the bigger context of what's going on in the U.K. What's happening there is we have a Victorian-era pipe system that is unable to cope with the levels of storm water, et cetera, falling now in the U.K., especially with urbanization, paving over grasslands, et cetera.
That storm water is flooding into the wastewater and waste systems and pushing sewerage leakage back out into the community. Addressing that is gonna require material capital investment from here, whether it is from the public sector or the private sector. With government debt to GDP where it is, private capital seems like a very good solution to address these problems with the water industry in the UK. Unfortunately, with the narrative being played in the media, we have other infrastructure investors saying to us, "Why would you bother with the brand risk of investing in UK water?" Our teams make the decision on where they invest in the UK. They have, over the last 30 years, invested and arranged GBP 50 billion of investment into the UK.
That's been in areas like green energy and wind farms, where we were a lead investor, communications infrastructure, data centers, fiber optic networks, affordable housing. I could go on and on. They have multiple choice of where to invest in infrastructure across the UK and Europe in those funds. They have chosen to go back and invest in Southern Water in the UK, regardless of the brand issues and the rhetoric playing out in the media. The system needs investment. Government balance sheets are stretched. Private capital is where the solution can come from. Our people have expertise in this. Our view is, at Southern, we could, by reducing the leakage 30% or the storm water draining into the waste by 30%, stop this leakage that's going on. With Southern, we put GBP 1.1 billion in.
We've reduced the leverage from 72 to 66%. We're about to put another half billion GBP in. We have a plan to spend GBP 2.2 billion of CapEx out to the 2025 next rate review cycle. The team is committed, as they are with every asset they manage, to driving better outcomes for the customers of the water utilities, for the communities, for the investors in the fund, and hence for the Macquarie shareholders, in terms of creating extra value that through their expertise and understanding, that then can be shared in by all of those stakeholders.
It's disappointing that the UK media has chosen to have a very narrow narrative on this and make a big deal of the debt in Thames Water, try and link it to us, who didn't own the asset for six years now, and it was investment grade when we stopped owning the asset. Create a narrative around vampire kangaroos, et cetera. When really, our team are very committed, as they are with all of the assets they manage, not just in the UK, but around the world. Not just our asset management teams, but all of our teams are really looking to drive better community outcome, create greater value in areas where we have deep expertise, and through that, generate asset value, et cetera, that can be shared with all stakeholders.
We're committed to doing that in the UK as other areas. Hopefully that gives you comfort that we are trying to drive the right outcomes. We know it's not just doing good things. You also have to share the message in terms of what you're doing. I hope, Mr. Mayne, that will help you understand what we're doing and share the message.
Thank you, Shemara. Can I have the next question, please?
Chair, we will now take a question from the floor from Ian Butler. Please stand to ask your question. Chair, we will now take our next question from the floor from Ling Lu. Please stand to ask your question.
I guess we can come back, if people are temporarily having difficulty. Maybe we should move to the next one. I can't see anyone.
Chair, our next question is from Christopher Schacht. Please stand to ask your question.
Senator, welcome back.
Thank you, Mr. Chairman. I just want to congratulate the company on this dividend policy. As people who invest for dividends, what you've just announced today, of what we had for the last 12 months, very, very good. That leads me to one of 2 questions. One, in lieu of the announcement today, by yourself and the CEO, that we expect a downturn in trading, et cetera, I noticed this morning, since that was announced, our share price has gone down AUD 8 a share. As we'd expect, that's the way the market operates. I want to ask, would the long-term dividend policy of the company be at risk?
I don't expect to get the dividend for the great last year we've just had. When would we get some indication that the dividend for the year we're now in, will be back at the long-term average of which you've been paying? That's my first question. The second question I have, which I raised last year, is about this ongoing matter of the German tax office that's now been going for 15 years, I think, since it first raised its head. I noticed the half-yearly report, it said that the and that Mr. the CEO said today, there'd be no further development in the last 12 months. I'd just like to question, do we have any idea when this will come to an end from the German authorities?
Secondly, is there anything that we are preparing, a worst case scenario, that people who were affected, our customers, by being involved in this scheme over 10, 12 years ago, are going to take legal action to recoup their money? What would be the contingency set aside if that, if that happens, even though we might win the court case against them, et cetera? I, those are my two questions, Mr. Chairman.
Thank you, sir. On the dividend, we can't obviously at the moment foreshadow what the dividend will be in AUD for the year ahead, because we're only just starting down the road of that year. We do not propose to change the dividend payout ratio policy. At this stage, unless something rather dramatic were to happen, we will stick to the payout ratio policy that we've had for some time. I imagine we can probably say something, perhaps at half year. Would that be about half?
Yes, Chair. I mean, obviously, as you know, we looked at the dividend policy range a few years ago. We had it at 60 to 80% and reduced it down to 50 to 70% at that point. When we did that, and the board obviously considered that at length, when we did that, we were obviously trying to set a policy range that we think is sustainable into the medium term. Just to endorse the Chair's comment in relation to that policy range. I mean, obviously, as we get to the end of this half, we'll look at, you know, the utilization of capital across the group.
We're obviously very conscious, and the board has always been very conscious of, you know, the shareholder desire for dividends coming out of the Group. We'll have a look at that at the half year and provide an indication of the inter-interim dividend. More generally, you know, I think as we think about dividend policy, you know, we're always thinking about trying to be reasonably consistent in terms of that policy payout range in any case.
Thanks, Alex. On the German matter, there is some text in the pack, I think, today. There's nothing really much more we can add, I don't think. As you say, this is unfolding very, very slowly. We do look at the financial provisions to take into account all these risks. We don't disclose the number for reasons that I think would be obvious. We revisit that periodically and examine it based on what we know and what is a reasonable set of assumptions about what could occur. That's as much as I can tell you, I think, on that one today. Could I have the next question, please?
Chair, our next question is from Sue Howes, ASA. Please stand to ask your question.
Good morning. I have two questions today. The first question. Oh, sorry. I'm representing the Australian Shareholders' Association. We have proxies from 458 retail shareholders with more than AUD 87 million in value being voted today. At the ASA, we received considerable comment on the quantum of remuneration at Macquarie. Could you give an outline of the board's view of remuneration and any deliberations the board takes when approving the final remuneration?
Certainly, it's a question that we thought might come up today, because there are some big numbers in the rem outcomes this year. First thing to say is the structure's been in place for a long time, as you know, the outcomes that we've decided on this year are wholly consistent with that framework that we've had for a very long time. The second thing to say is that the largest outcomes are aligned with results in those business, and one business in particular, where the group head has more than trebled the profit this year compared to where it was when he took on that role just a few years ago.
We evaluate performance, of course, not just on the financial outcomes, but on a range of non-financial factors, leadership, risk management, and business development, and so on. All of those things also have to be performing well, but we're quite comfortable with the rem outcome in each of these cases. As I say, it's wholly consistent with the framework that we've had for a very long time. I think the other point to note is that we do operate in a global environment. We're a global company. We're earning more than half of our profits outside Australia. Half or more of our employees are outside Australia. The teams that we have working for us are in these very highly skilled areas. They're in a global market.
These people do get approached routinely by other competitors, some of whom pay much, much more than we do. We have to take account of that factor, even though these numbers are large compared to Australian companies, we're operating in a global market. The board is conscious of all those things. We deliberate very carefully, both at the rem committee, which Jillian leads, and then again, at the board. I suppose the other point to make is that most of the rem's at risk. Large performance pay is paid mostly in equity, and you don't get it today. You get it down the track when it vests, and, depending how the share price performs over that period, that will drive what it's actually worth to you when you get it.
It's highly aligned with the interests of shareholders in driving ongoing performance in the company. That's how we think about it.
Thank you. My second question is, as a result of asset sales and funding, the company has considerable capital sitting waiting opportunity. This has been the case for some time now. Could the board give its views on potential uses for this capital?
Well, you're right to point to the strength of the capital position, and this is something that Shemara highlighted in her presentation. The company, both in the bank and at a group level, is very strongly. We can't know that at the moment. Certainly, the management team are continually scanning the horizon, looking for opportunities for capital deployment. That said, we are highly conscious of the need to be disciplined. It's your capital, not ours, and we are highly conscious of the need for discipline. We're not just hoarding capital for the sake of it. We're looking for deployment or alternative uses if we can't deploy appropriately. I can't foreshadow particular deployments today. There are always things we're looking at.
Chair, our next question is from Constantin Investments Pty Limited. Please stand to ask your question.
Thank you. I think this question is probably for Shemara, but we'll see how we go. Question has answered some of my concerns about locations with this Macquarie playbook, values, mission, and what tells you or what sort of metrics are in place to tell you that that's working?
That's a great question, actually, and as I said in my earlier, I will give Shem to comment on by frequent interaction of the senior management team with people in their areas right around the world. Frequent travel, obviously, to achieve that. We follow a lot of metrics on staff engagement and on various other indicators of culture, watching for signs that things might be going astray. I can only tell you that we're highly focused on those cultural core sets of values that the company has always had. Now, do you want to add, Shem, perhaps?
Of course, I'll also check whether Nicole would like to add anything. Ultimately, as a financial services business, if you're in services, people are your key asset, and the culture and environment you create to attract the best people and empower those people to deliver to their full potential. For us, it's incredibly important to attract the best people, but then, help them develop in the way of the culture that has driven our results for 54 years. What we do is run induction programs when people join, because today they're joining us in 33 different markets and in different business lines, and they're each delivering different things to their stakeholders. We have sessions like Success at Macquarie induction programs that you come into.
We do them virtually as well, because people are in several regions, but senior people in that region will do something. We make sure they're mentored and managed as they come in and gradually take on more and more responsibility, especially if they're early starters in their first job. Even if they're joining laterally, you know, we give them more and more latitude as they spend more and more time with us. As Glenn Stevens mentioned, we have these 3 basic cultural principles in addition to our purpose statement of empowering our people and all people to innovate and invest for a better future, which is opportunity, accountability, and integrity. Opportunity for us is thinking about the need, using your deep expertise and where we can bring value.
Accountability is about the risk management, once you've had the idea, the disciplined execution in delivering on that. Integrity is thinking about the long-term impact on all stakeholders. Gradually, we give people more latitude in doing that. We also encourage them a lot to work with their diverse colleagues so that we have stronger outcomes as a team, a diverse team, than an individual. You know, there are things we reinforce a lot, like things will go wrong, encouraging people to feel safe, to speak up very quickly if there's an error, escalate it early, because a problem shared is a problem halved. You bring people in early, you can address and learn from things.
We track this constantly, we have reporting that we do constantly in terms of not just financial results, but these come to the board, operational incidents, cultural incidents. We do a lot of pulse checks on what's going on. We do a voice survey every year to hear what's going on. If there are problems, we try and look at whether there are thematics and dive in on that. I don't know, Nicole, if you would like to elaborate? Okay. Thank you. Nicole's our Chief Operating Officer, HR reports to her and it's an awesome team.
Is there another question?
Chair, our next question is from Terry Lee. Please stand to ask your question.
Firstly, I'd like to congratulate Shemara for another year of good return. Return on equity 16.9% far exceeds the general banking average of 12.3%. Congratulations. Having said that, I noticed that, well, newspaper that the Macquarie Bank has started changing their direction to the U.K. and Europe. Maybe the U.K. paper basically are saying Macquarie is a vampire kangaroo bank. I'm sure you know about it, which I don't know, it's congratulation or whatever. What I need to know is that would you be able to number one, what is your vision on the European operation? Two, would you be able to match the same return that we're getting in the Asian area, where we have the growth of Asia, especially China and India, they're coming up?
Basically, it's on the commodity for the last few year, and we're getting very, very good return on it. Why are we going to Europe where there's a war over there, and you get all this problem with the UK water? I know that you tell us through Stephen Mayne's question, that you invest those money. It's not our money, it's an infrastructure fund that we're not involved much in it. What I'd like to know is how much actually Macquarie Bank invest our shareholder equity into any of those funds. You just bought now 2 property in Milan and France. Are any of those our money? That how much what's the percentage of shareholder equity are going into that? Because that will affect our return if something go wrong in there.
I can't give you the exact numbers on what those premises cost. We certainly have increased our presence in continental Europe over recent times because that's where we see a lot of the opportunity. We did talk earlier about. The EU, of course, we have to do the EU separately from the UK now, after Brexit. There are opportunities there. We have a European banking entity, and we have non-bank entities also operating in Europe who see many opportunities. Some of those operations are still quite small. Others of them have grown quite quickly and been very profitable, especially in the energy area over the past year. Right on the magnitudes-
Of course. First, I was going to say thank you, Mr. Lee, for congratulating us on the 16.9%. I should say I can't take the credit for that because there are 20,000 people who work for us who made that happen. I think Glenn and I and the board get the benefit of that. Basically, in terms of our regional investment outside of Australia, we let that be led by our teams on the ground and let them go where they see opportunity in these markets to deliver value where we have expertise.
In the UK and the European region, we've been investing now for 30 years of our 54, where our team saw opportunity, for example, when we helped develop infrastructure as an asset class for investors to take that to the UK and then through to Europe. The European, Middle East, Africa region now contributes 25% of our earnings and has consistently done that, and we get as good returns in that region as we do in the rest of the world. That's both balance sheet investment operations, but also our asset manager. I certainly wouldn't say we have nothing to do with that. We care a lot about what the asset manager delivers for the investors in those funds. It's very important to growing that franchise that they continue to deliver, and they're very good at it, happily.
I would just say briefly, you know, you talked about Asia. We didn't make a top-down decision sitting in an office in Sydney, that we should go to China. Our real estate teams, in the early 1990s, saw urbanization happen there and thought we could develop residential housing. From there, and in fact, our new director, Sue Lloyd-Hurwitz, may have been involved in that, saw the theme of urbanization create a need for shopping centers and second and third tier city shopping centers, and then as online shopping happened, moved to industrial warehousing and logistics.
Really driven by our local teams with their expertise on the ground, saying, "Can we add value in this community as it goes on its journey, and also share that value with our investors in our funds, our shareholders?" The European region, I think, you know, the fact is, outside of Australia, we're very small in the markets we're in, and I think we will continue to grow in absolute terms. As a percent of Macquarie's earnings, you're probably going to see Australia, even though it's growing in absolute terms, shrink as a percentage representation. The Americas, EMEA, and Asia will probably step up.
What is your percent of shareholder equity are invested in Europe?
Yeah, thanks, Mr. Lee. Obviously, the amount varies over time. You know, from a, from a sort of, I guess, a permanent long-term capital, it's probably gonna be around 10 to 15%, something like that, of shareholders' equity is going to be invested in Europe and the UK. As I say, that number changes over time. For instance, you know, in 2017, when we bought the Green Investment Bank from the UK government, obviously that was both an equity investment and a debt investment in the UK. Our equity contribution, or the proportion of shareholders' funds that we'd invested in the UK in that situation, stepped up for a period of time while we bought that asset on board.
The amount changes over time, but probably on a, on a more medium-term basis, 10 to 15%.
Male staff in the funding and all that. Would you be able to get the same return we're enjoying now, as about a 15 to 16% return on equity? Yeah, Europe's more risky than we are here.
Well, we're looking to get good risk-adjusted returns everywhere we go, including Europe, otherwise we wouldn't go there. I don't think we're in a position to promise you a particular number, 'cause we can't really promise a particular number anywhere. I think, anyway, that's as much as we can do on that question today, Mr. Lee. Thank you. Can I have the next question, please?
Chair, our next question is from Christopher Schacht. Please stand to ask your question.
Thank you, Mr. Chairman. I just have 2 comments. I've been, in the last 10 years, I've been a shareholder, very small, of a number of major financial institutions in Australia, banks, including yours, BHP, et cetera, et cetera. This is the first time I've come to a AGM where a majority of the board are women, if I can count correctly across the top table. I just want to comment that I think that should be recorded, that of all the major companies in Australia, I think you may be the first to have a majority of women. Clearly, part of the success of the company for that. The other comment I wish to make, and Shemara and others have commented about business in Asia, business in the world, around the world, where clearly that's our success.
As I mentioned to you over morning tea, I came across information of books written by very professional demographers who point out that the world's population is actually going to be in decline. China, by the end of this century, will go from 1.4 billion people to 800 million people. That's 600 million less Chinese. If you're investing in housing, et cetera, infrastructure, there may be less demand. Japan, by 2040, will be down to 98 million people from 121 million. In Australia, if it wasn't for immigration, our population would be in decline, 'cause our fertility rate of women is 1.4%, and you need 2.1 to maintain the numbers.
Therefore, as a bank, as an institution, long term, I trust the board, over a period of time, will start making an interest in what is going on in the world's population. It's overwhelmingly brought about by the fact that women, even in the Third World, are becoming better educated, urbanized, and are making their own decisions about their own fertility and how many children they bear, which I think in the long run is good for the world. I just wondered if that is something, in the long term, the board and the company will look at?
I won't quibble at all with the statistics you quote. Population aging, and indeed absolute decline in some places, is real, and it will have economic, and for that matter, social and political effects, I would imagine, in those countries. There are a lot of challenges for the world looking forward. I think the one we're probably most focused on is the climate side, where we think we can make a contribution. To the extent that we have to respond to demographics, or there's opportunity for us to profitably deploy your capital, and in response to that, I'm sure we'll be cognizant of that. I can't say it's been a major factor in discussions to date, but as the trends that you talk about unfold, I imagine it might well be in the future.
Thank you.
Chairman, can I just ask about the board composition?
Yeah.
Did the Nominations Committee of the board consciously go out to always just find the best, whether they're male or female? Or were they in accordance with a number of other institutions' comments about female participation on boards? Was that also in the in the calculation, or do you just tell me as another white Anglo-Saxon male, "We only ever pick the best, and they just happen to be a majority of women. That's our good luck?
Well, look, there's not a quota, if that's what you mean. Thank you for your compliments regarding gender diversity, which is quite notable in this company. I must say that the women and the men, that, my colleagues on the board are highly effective directors, and I'm very pleased to be working with them. Thank you. Can I have the next question, please?
Chair, our next question is from Patrick Brown. Please stand to ask your question.
Mr. Stevens, in a number of times today, people on the forum here have mentioned the quality of integrity. Can you tell me whether you intend to keep the audit being done by a company that has no integrity?
Since you raised that question, let's say what we're doing. Firstly, as we've previously announced, we will be doing a comprehensive review of the external auditor. That was already planned prior to the recent PwC matters arising. Secondly, the part of PwC that we deal with is the audit practice. To my knowledge, there have been no questions raised about the integrity of that process. I can say that we have sought assurances and received them from PwC that none of the people who've been alleged to have received confidential information have ever worked on our audit. We think we're quite comfortable with that, and a review will be done.
We will have the results of that, I think, in the early part of next year. We will assess that then. I'm not gonna preempt the outcome of that process. I don't think that would be sensible. Could I have the next question, please?
Chair, the next question is from Craig Edward Corfield: Ms. Wakefield-Evans, as Chair of the Governance and Compliance Committee, your role in oversight of regulators' laws is critical. APRA imposed an AUD 500 million capital penalty against Macquarie for multiple and material breaches of APRA's Prudential and Reporting Standards. APRA said these breaches raised serious questions about Macquarie's risk management practices. John Lonsdale said, "For one of the country's largest financial institutions to have committed breaches of this nature is disappointing and unacceptable." In contrast, the AFR's Alex Vickovich reports that Macquarie celebrates its own risk management procedures, telling investors, "Risk is integral to who we are." When I read the annual report, these APRA penalties were not only downplayed but deceptively described in ultra-positive terms. As a director and chair of compliance, shouldn't you ensure that Macquarie's failures and penalties are not spruiked as positive PR?
I'll invite Nicki to answer, but I don't think it's correct that they were downplayed. We've taken this very seriously, and as I said in my remarks at the beginning, there's a very major uplift program underway to address these and other regulatory issues that we have. That work's ongoing. It's overseen by the board. APRA is fully informed, and to my knowledge, are so far content with progress. I don't actually accept the premise of your question, but you're welcome to add if you wish.
Thank you, Glenn. I'll comment. We take the board of management have taken this matter very seriously, and we also take management obligations very seriously as well. I would say that as a director and company director for some time, that globally, risk management practices have been strengthened by companies in our sector, and we've taken a lot of time to strengthen our oversight at the board level and the management level of compliance, regulatory, and risk. I think you're seeing that in our response to this issue. Thank you.
Thank you. Next question, please.
Chair, our next question is from Stephen Mayne. The question is: Macquarie now has 6 female directors, which is the most of any ASX-listed company and a majority. We also have a female CEO, company secretary, outgoing audit signing partner, and incoming audit signing partner. Well done. When it comes to diversity, the main gripe is Macquarie's lack of geographic diversity on the board, with the vast majority living in Sydney by accident or design. Also, did we use a headhunting firm to help recruit Susan Lloyd-Hurwitz? Were multiple candidates interviewed, and could Susan detail which of the existing Macquarie directors she knew before engaging in the recruitment process?
Well, there's two questions there, so let me take those in turn. On geography, it's true that, at the present time, the directors reside in Australia, many of us in Sydney, not all. It's also true that, our directors, some of them in particular, spend quite a bit of time offshore. They've had extensive offshore experience in their executive career and as directors. The board, of course, itself travels twice a year to Macquarie's offshore operations, so we do actually get around. We do get out, and I think we've got a good sense of what's going on, in the rest of the world. It's routine, at board meetings for group heads and other senior executives to be dialing in from various other jurisdictions where they are located.
We're open to the possibility of offshore-based directors, but I think we've got quite good coverage on the basis of the skill mix and experience mix we have at present. On director recruitment, as you put it, we do use search firms to help us scan the horizon. A number of people also knew Susan Lloyd-Hurwitz directly, and so through various channels, we were, we were in touch pretty quickly, I think, when you finished at Mirvac, and Susan Lloyd-Hurwitz is well known to most of the directors here. Feel free to add if you wish. No? Okay. Next question, please.
Chair, our next question is from Stephen Mayne.
PwC has been the auditor of Macquarie since before the 1996 listing, and the job has never been tendered. It has been paid more than $1 billion by Macquarie for auditing and other services over this period, including $79 million this year and $72.7 million in the previous year. Kristin Stubbins was PwC's Macquarie audit signing partner for the fourth time this year, while simultaneously performing the role of acting CEO of PwC Australia during the tax leaks crisis that has rolled through the PwC Australian businesses in recent months. Could Kristin please explain how she was able to simultaneously perform both roles in recent months, and does this explain the decision to appoint Voula Papageorgiou as audit signing partner next year after 4 years, when the rotation of audit signing partners normally extends to 5 years?
Have we made a definitive decision to tender an audit job in 2024 for the first time?
Is that it? That's several questions there. Well, I spoke earlier about the process we're undergoing to have a comprehensive review of the external audit. There's nothing more to add there, Stephen. We will await the outcome of that process. Kristin is not here today. Sam Hinchliffe is here for PwC to answer questions about the audit itself, of which this isn't one. I'd only say about Kristin, that her commitment to our work while she took on the additional load at PwC was commendable, and she's a person of incredibly high integrity and commitment, and I wish her well in the new role that she's now taking on. Next question, please.
Chair, our next question is from Craig Edward Corfield. The question is: Reserve Bank Governor Philip Lowe describes PwC's failures, deception, and cover-up as appalling. We heard at the Senate audit inquiry that the sector operates completely free of any oversight and without any obligation to report misconduct. In attempting to conceal breaches, PwC claimed legal professional privilege, understandable but unacceptable, now knowing their involvement in Robodebt. As a former Reserve Bank governor, do you agree with Mr. Lowe that PwC's behavior is appalling? Whilst it is clear you failed to fire PwC, have you or will you guarantee that PwC is excluded from any consulting?
I think that question is largely not relevant to the audit itself or today's agenda, and I've never made it a practice to comment on things that Phil says out of respect for his role. That's all I'm gonna offer on that issue today. There's nothing beyond what I've already said about the process we're going through on the audit. Next question, please.
Chair, our next question is from Harrison James Brown. The question is a question for Shemara. How was Macquarie best placed to capitalize on last winter's European energy crisis? In your view, with what structural changes have taken place since then to ensure that the same situation does not occur again this year?
Thank you. Our role in the energy sector is providing services to producers, but also consumers, be they individual households, hospitals, schools. What we're trying to do is provide financing support, risk management support, transportation, storage, et cetera, and hedging as well. Last year, the European region did end up very short of gas, which is one of the huge sources of energy they rely on due to what happened with Russia and Ukraine. They were able to contain demand really strongly and manage the issues there. The storage worked well. The winter ended up warmer than we'd expected, so the gas demand wasn't as dire as expected.
Whilst the gas price, TTF, which is the benchmark price for European gas, had gone from sitting in the EUR 20-30 for a few decades since the curve started, it shot up through the EUR 100-300. It's now come back down, and I think we're all very pleased to see that for the people of Europe. Having said that, they're needing to transition away from Russian gas, and so the three global business lines are trying to help them in that transition, be it with the balance sheet in our green energy business, helping with investment in new infrastructure. The asset manager is helping, not just generation assets, but transmission and distribution assets, and the Commodities and Global Markets is also helping in terms of facilitation.
You know, at the moment, they're having a very hot summer. I don't think Europe has got a long-term solution yet. It is going to have to still work to find alternatives to Russian gas, particularly in terms of firming, because a lot of the renewable energy that we're working to bring to Europe is still intermittent. We're working on many things with the European community in responding to the issues that went on there. We're there for the long term. Sometimes if there's heightened need, we're having to step up and offer more service. If there's less need, we still grow the underlying level of support that we're giving to that region. Hopefully that answers.
Thank you. Next question, please.
Chair, our next question is from Craig Edward Corfield. The question is: As Ms. Broadbent is the chair of the REM committee, we should expect a very high standard of accountability and integrity, core Macquarie values, to assess executive REM. Indeed, Ms. Broadbent co-authored the APRA report into failures of governance, culture, and accountability at the Commonwealth Bank of Australia, which was scathing of many years of deception, misconduct, and putting greed and self-interest ahead of CBA's customers. I frankly fell over reading your positively glowing annual report compared to the poor treatment, cover-up, and broken promises we experienced by Macquarie's most senior executives. Many Australians are sickened to see the preposterous salaries paid out to those with accountability under the BEAR regime, who fail their duties whilst dumping the directors. Ms.
Broadbent, will you meet with me to hear a different view to the sanitized, disinfected assurances you received from executives?
Well, I think that's largely a comment, and I think we might move on to the next question. We've dealt with the personal customer issues to the extent we can earlier. Jillian, you're welcome to comment if you wish, but c
an we have the next question, please?
Chair, our next question is from Stephen Mayne. The question is: After ISS recommended a vote against Macquarie's remuneration report, we are likely to suffer since 2007, when there was a wasn't the proxy position being disclosed in a timely manner to facilitate discussion about the against vote? What concerns did ISS raise, and how big is the protest vote? Could Remuneration Committee Chair, Jillian Broadbent, also explain on what grounds CGM boss, Nick O'Kane, was paid 57-
... past 3 years, a record at Macquarie. Surely more of this bonus should have gone to the broader divisional. Could Shemara also comment if she is comfortable having someone who reports to her paid $24 million more than she got last financial year? Shouldn't the system always see the CEO of the entire enterprise paid the highest bonus?
Regarding ISS, I'll invite Jillian to speak in a moment if she wishes on the process. We've already covered the remuneration, I think, but we can revisit that if need be for Nick. Regarding ISS, it's true that they recommended to their subscribers to vote no, some of whom have. The proxy vote results will be displayed quite shortly. I would say that we found it quite disappointing that unlike every other proxy firm and shareholder group, ISS refused to meet with Macquarie.
Consequences for that were also substantially up. We go through, there's a process of competition and relativities in the market, and then there's the correlation with the bottom line result. In addition to that, we also consider, as been referred to, the non-financial factors, which are risk management, capacity, business, 3 things. To manage the risk management and get the result we did from CGM over that year was outstanding as far as Nick was concerned. He was practically working 24/7 throughout the year as the markets were so incredibly volatile and global as a result of those movements. On people leadership, he's really built up an extraordinary team, and on business leadership, he's got a very good strategy of expanding the client base.
We didn't have any reason other than to say you've done an outstanding job on all those four factors. Shemara can comment on her preparedness.
I'm very happy to comment briefly. I guess I'd say I fully respect the board's decisions in terms of compensation decisions they've made for all of our people, not just the top people. Development, risk management, as well as financial return, Nick performed strongly on all of those. He, as Glenn said, has grown the earnings in his time as Group Ed almost 4x , indeed spent 20 years building the business that delivered the bulk of those earnings. In the global market, again, as Glenn said, the market for talent like Nick is very strong, there are many alternatives of where he could potentially earn multiples of what he does here. He's very committed and chooses to work with us. I'm very supportive as CEO and a member of the board in terms of the compensation that Nick has been paid.
For shareholders to get AUD 6 billion plus out of the Commodities and Global Markets business, we need to retain top talent to achieve that sort of thing, and I think it was a decision I strongly support from the board. As far as my compensation's paid, I'm grateful for whatever the board, in its discretion and judgment that I trust, determines is appropriate for me every year.
Next question, please.
Chair, our next question is from Peter Caloyero. The question is: With the slow rollout of the use of generative AI at Macquarie, are we in danger of being left behind by our comp- and thus losing a competitive advantage?
I don't think so. As we said earlier, and as Nicole detailed, and I think in the digital space, Macquarie is actually exceptionally well placed in the banking area. No, I don't think we're at risk of losing competitive advantage there. Nicole, would you like to add anything? No. Thank you. Next question, please.
Chair, there are no further questions.
All right. Well.