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Macquarie Group Limited (MQG) announced a net profit after tax attributable to ordinary shareholders for the year to 31 March 2010 of $1.05 billion, an increase of 21% on the previous year and slightly ahead of consensus expectations. The company said the result reflects improved market conditions and the diversification and global reach of the businesses.

Assets under management at 31 March 2010 increased to $326 billion, which the company said predominantly reflected the acquisition of Delaware Investments in January 2010.

Meanwhile, group capital at 31 March 2010 was $11.8 billion, which was $4 billion in excess of the group’s minimum regulatory capital requirement. Macquarie Bank’s tier 1 capital ratio was 11.5%, up from 11.4% a year earlier.

The company said return on equity rose from 9.9% in FY09 to 10.0% in FY10.

Managing director and CEO, Nicholas Moore, said each of the company’s operating businesses delivered improved results on the prior year, while the company remains very well funded.

”Our term assets are covered by term funding and equity and we have continued to grow our deposit base,” Mr Moore said.

Macquarie said retail deposits increased to $15.5 billion at March 2010 from $13.9 billion at September 2009 and funds under management in the Macquarie CMT as at 31 March 2010 were $9.5 billion.

Chief financial officer, Greg Ward, said cash equities were well up on the prior year due to improved equity markets and there were strong contributions from debt markets and the new credit trading business.

“The metals and energy capital business was up on the prior year and the Corporate and Asset Finance Division recorded significant growth in corporate lending activities,” Mr Ward said.

The company said there were one-off gains realised from initiatives undertaken by the listed funds, including the internalisation of the management of Macquarie Airports, Macquarie Leisure Trust and Macquarie Media Group, the restructure of Macquarie Infrastructure Group and the sale of Australian REIT investments to Charter Hall Group.

Writedowns, provisions and net equity accounted losses totalled $96 million in the second half, down from $758 million in the first half, Macquarie said.

”As foreshadowed at last year’s result, the compensation ratio is returning to historical levels, rising to 43% for the year from 41% in the 2009 year,” the company said.

Looking ahead, Mr Moore said the company currently expects improved operating results for all of its businesses in FY11 compared to FY10.

“Over the medium-term, we continue to be well placed due to the global depth and reach of our businesses, the diversification of business mix, a strong committed team with interests aligned to shareholders, a strong balance sheet, capital and funding position and effective risk management,” he said.

“Subject to economic activity continuing to increase across all major markets, we expect continued growth in revenue and earnings across most businesses over time and continued growth in our global businesses driven by expanding our strong client franchise.”

The group declared a final dividend of $1.00 per share unfranked, up from the 86c per share dividend unfranked paid in the first half.

At the close of trade yesterday, Macquarie shares were trading at $48.35.

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