By Alice Uribe

SYDNEY-- Macquarie Group Ltd., Australia's biggest investment bank and asset manager, reported a 10.4% rise in annual profit, driven by a strong result in its markets unit including commodities.

Macquarie said its net profit totaled 3.02 billion Australian dollars ($2.35 billion) in the 12 months through March, up from A$2.73 billion a year earlier.

"Macquarie's businesses continued to perform well despite challenging market conditions, reflecting the diversity of our activities and ongoing focus on prudent risk management," said Chief Executive Shemara Wikramanayake.

Macquarie in February said it expected net profit to be up 5-10% on fiscal 2020, as extreme winter weather in North America drove demand for its gas and power infrastructure.

Directors of the company declared a final dividend of A$3.35 per share, 86% higher than the A$1.80 per share declared last year. According to Visible Alpha, consensus expectations were for a final dividend of A$4.83.

"Macquarie remains well-positioned to deliver superior performance in the medium term," said Ms. Wikramanayake.

Macquarie, which has a reputation among analysts for conservative forecasts, last year didn't provide guidance for fiscal 2021.

The company's annuity-style activities, which are undertaken in part by Macquarie Asset Management, generated a combined net profit of $A3.31 billion, down 4.0% from a year earlier.

But its markets activities, which are undertaken by Macquarie Capital and most businesses in the Commodities and Global Markets unit, delivered a combined net profit contribution of $A2.78 billion, up 39% on the previous year.

While Macquarie Capital delivered a net profit contribution of $A651 million, down 15% on fiscal 2020, relating to lower fee and commission income, CGM posted a net profit contribution of A$2.60 billion, up 50% on last year.

"The result was driven by increased revenues throughout the year across the Commodities platform with strong risk management results across Resources, North American Gas and Power, EMEA Gas and Power and Agriculture," said Macquarie.

The Australian financial services company said it maintains a strong capital position and a well-funded balance sheet, with group surplus capital of A$8.8 billion at the end of March, up from A$7.1 billion the year before.

Macquarie's banking unit has a common equity tier 1 level 2 ratio of 12.6%.

The company, which began as a subsidiary of London merchant bank Hill Samuel & Co., generates most of its income outside of Australia.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

05-06-21 1956ET