May 8 (Reuters) - Top Australian investment bank Macquarie reported its biggest annual profit in three years on Friday, beating market consensus, as its key commodity division benefited from a rise in client hedging activity amid heightened market volatility.
Shares of the company jumped about 3% in early trade to a record high of A$249.49, while the benchmark stock index was down 1.1%.
Income from the Commodities and Global Markets (CGM) segment, Macquarie's top profit-making division, jumped nearly
50% to A$4.22 billion ($3.04 billion) as the Iran war sent oil prices soaring above $100 a barrel and roiled global markets.
Its market-facing commodities business, which provides financing and lending to clients in commodity and financial markets, benefits from trading during bouts of market volatility.
Macquarie said CGM's contribution was primarily fuelled by client hedging activity across the Global Gas and Power and Global Oil units, coupled with higher trading income from supply and demand imbalances in North American Gas and Power and oil trading.
It was also boosted by the disposal of its OnStream meters platform earlier this year. Macquarie had bought the platform as part of an acquisition of a UK smart meters business in 2025 for around 900 million pounds ($1.22 billion).
Combined with the strong performance of its market-facing and annuity-style businesses, Macquarie's full-year net profit after tax attributable jumped to A$4.85 billion, beating a Visible Alpha consensus of A$4.39 billion and up 30% from A$3.72 billion in the previous year.
"Macquarie is positioning itself for future deployment opportunities, and we expect that they are more confident around opportunities in CGM given potentially higher-for-longer commodity volatility," Citi analysts said in a note.
Sydney-headquartered Macquarie said it would conclude its on-market share buyback programme, stating strong business growth and prevailing market conditions meant no further purchases were expected.
The lender had extended the A$2 billion share buyback programme by 12 months in November after repurchasing A$1.01 billion worth of shares as of November 7. It said it had made no purchases since then.
Macquarie declared a final dividend of A$4.20 per share for the year, up from A$3.90 apiece in 2025.
($1 = 1.3883 Australian dollars)
($1 = 0.7380 pounds)
(Reporting by Nikita Maria Jino and Sherin Sunny in Bengaluru; Editing by Tasim Zahid, Jonathan Ananda and Subhranshu Sahu)
