Sydney, 02 June 2017
Macquarie notes speculation in today’s Australian Financial Review regarding the implications of the Major Bank Levy on Macquarie Group Limited.
The impact on Macquarie Group is still unclear.
It is expected Macquarie’s Australian banking subsidiary, Macquarie Bank Limited, will be subject to the levy.
It is proposed the levy will be calculated on a standard yet to be determined by the Australian Prudential Regulation Authority.
Macquarie Group’s position is unique because of the mix of banking and non-banking businesses, and the predominance of its international and wholesale businesses relative to its Australian retail banking business. (This business is carried out in the Banking and Financial Services Group which contributes 11% of operating group profits, is the eighth largest mortgage lender in Australia and represents approximately 2% of the Australian market, and has approximately 2% share of the retail deposit market.)
On assessing its impact, it should be noted that:
Thus the scale of Macquarie Bank Limited’s international and wholesale businesses means the levy may have unintended and disproportionate consequences on its local earnings.