Press Release

Macquarie Bank Limited to seek shareholder approval for establishment of a Non-Operating Holding Company

Sydney, 20 August 2007

The Chairman of Macquarie Bank Limited, Mr David Clarke, today announced further details of the Bank’s proposed establishment of a non-operating holding company (NOHC). He also announced that the Bank intends to convene an Extraordinary General Meeting of shareholders on 25 October 2007 to consider the proposal.

“As we stated at our full year results briefing and at the Annual General Meeting, the Bank’s diverse international businesses are now growing faster than our Australian banking business and a significant portion of Macquarie’s businesses, whilst financial services in nature, are not strictly banking. We have effectively outgrown the conventional banking regulatory model.

“The NOHC structure would provide Macquarie with the flexibility to continue to pursue growth in the regions and markets in which we operate,” Mr Clarke said.

Mr Clarke also announced that Macquarie had received in-principle approval from the Australian Prudential Regulation Authority (APRA) to establish a NOHC and that Macquarie had obtained commitments for a term bank facility of $A8 billion from a syndicate of major international and Australian banks.

“In addition to the in-principle APRA approval, legislation was recently passed by the Australian Parliament to facilitate the creation of bank NOHCs and Macquarie has so far received most of the private tax rulings which were also necessary. Some aspects of the proposal remain subject to the approval of the Federal Treasurer, the Australian Securities Exchange (ASX) and other authorities and the relevant applications have been lodged in this regard,” Mr Clarke said.

The establishment of the NOHC is proposed to be effected by a scheme of arrangement to be approved by the Bank’s shareholders. Under the scheme of arrangement, shareholders would exchange their shares in Macquarie Bank Limited for shares in the new NOHC which will be listed on the ASX and named Macquarie Group Limited.

Macquarie expects to send shareholders a detailed explanatory memorandum outlining the NOHC proposal in late September.

Mr Clarke said the $A8 billion term funding facility would have maturities ranging from one to five years. The funds would be applied by Macquarie Group Limited toward the acquisition of investment banking businesses and some other non-banking activities from Macquarie Bank Limited.

The facility is expected to be drawn down later this year once the NOHC structure is in place.

Mr Clarke said that under the proposal, Macquarie Group Limited would be regulated by APRA as a NOHC and Macquarie’s strong emphasis on risk management would continue to apply throughout the Group.

Macquarie Bank Limited would become a wholly-owned subsidiary of Macquarie Group Limited and remain a licensed Australian bank.

Mr Clarke said Macquarie Group Limited’s Board and Executive Committee would comprise the same members as those currently serving on the Board and Executive Committee of Macquarie Bank Limited.

Under the proposal, Allan Moss who is currently Managing Director and Chief Executive Officer of Macquarie Bank Limited would become Managing Director and CEO of Macquarie Group Limited and Richard Sheppard who is currently Deputy Managing Director of Macquarie Bank Limited would be appointed Managing Director and CEO of Macquarie Bank Limited, following the establishment of the NOHC. David Clarke would remain Chairman of Macquarie Bank Limited and would become Chairman of Macquarie Group Limited.

Mr Moss commented: “The creation of the NOHC will facilitate Macquarie’s continued international expansion in our investment banking, stockbroking, specialist funds management, trading, and other activities.”

 

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