Debt investors

Unsecured funding

Macquarie Group funding structure

Macquarie Group has two primary external funding vehicles:

  • Macquarie Bank Limited (MBL) which provides funding to the Bank Group.
  • Macquarie Group Limited (MGL) which provides funding predominately to the Non-Bank Group

MBL and MGL have separate and distinct funding, capital and liquidity management requirements.

1. The Bank Group comprises BFS, CGM (excluding certain assets of the Credit Markets business, certain activities of the Commodity Markets and Finance business and some other less financially significant activities), and certain activities of the Equities business in Macquarie Capital. The Non-Bank Group comprises Macquarie Capital (excluding certain activities of the Equities business), MAM and certain assets of the Credit Markets business, certain activities of the Commodity Markets and Finance business and some other less financially significant activities of CGM.

Macquarie Bank Limited and Banking Group

Macquarie Bank Limited (MBL) is an APRA regulated Authorised Deposit Taking Institution (ADI) comprising Australian and international financial services businesses.

MBL provides funding to the Bank Group.

Macquarie Bank Limited (MBL) is an Authorised Deposit-taking Institution (ADI) regulated by the Australian Prudential Regulation Authority (APRA).

MBL has the following accreditations for calculating Capital Adequacy:

  • Foundation Internal Ratings - Based Approach (FIRB) for credit risk
  • Advanced Measurement Approach (AMA) for operational risk
  • Internal model approach for market risk
  • Internal model approach for interest rate risk in the banking book

These advanced approaches place a higher reliance on a bank’s internal capital measures and therefore require a more sophisticated level of risk management and risk measurement practices.

The Macquarie Bank Group ratios as at 30 September 2021 on a Harmonised Basel III basis1 are:

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Ratio As at 30 September 2021
Macquarie Bank Group Common Equity Tier 1 capital ratio2 14.8%
Macquarie Bank Group Tier 1 capital ratio 17.0%
  1. Harmonised Basel III relates to the Basel III guidelines defined by the Basel Committee on Banking Supervision, documented in the following: ‘Basel III: a global regulatory framework for more resilient banks and banking systems’, published December 2010 (revised June 2011) by the Bank for International Settlements (BIS) and further updated by BCBS 279 ‘The standardised approach for measuring counterparty credit risk exposures’.
  2. Common Equity Tier 1 capital represents Tier 1 capital excluding hybrid Tier 1 instruments.

Basel III

APRA is requiring Australian banks to follow an accelerated Basel III implementation compared to the Basel Committee’s gradual phase-in of Basel III, with a minimum Common Equity Tier 1 (CET1) ratio of 4.5% required from January 2013 and immediate phase in of additional CET1 deductions. In addition, APRA has added conservative overlays (‘super equivalence’) to the Basel Committee’s Basel III capital requirements.

Macquarie Bank Group position at 30 September 2021 meets the APRA latest Basel III requirements, i.e. minimum ratios plus capital conservation buffer.

Further information

For more information on APRA's ADI Prudential Framework read the ADI section of the APRA website.

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Ratings agency Short-term rating Long-term rating Latest report
Fitch Ratings F-1 A/Stable Report
Moody's Investors Service P-1 A-2/Stable Report
Standard & Poor's A-1 A+/Stable Report
Ratings upgrade

MBL has three debt programs:

  • $US25 billion Commercial Paper Program
  • $US20 billion Rule 144A/Regulation S Medium Term Note Program
  • $US25 billion multi-instrument Regulation S Debt Instrument Program (DIP)

Securities that may be issued under the DIP include:

  • Euro commercial paper
  • Euro commercial deposits
  • Euro medium-term notes
  • Senior and subordinated fixed or floating rate notes
  • Transferable deposits

Download documents for most recent DIP offering.

Documents Incorporated by Reference

Financial Statements

MBL DIP previous terms and conditions set out on:

MBL Constitution

Funding

MBL is mainly funded by capital, term liabilities and deposits.

The key tools used for accessing wholesale debt funding markets for MBL are:

  • $US25 billion multi-instrument Regulation S Debt Instrument Program
  • $US10 billion Commercial Paper Program
  • $US20 billion Rule 144A/Regulation S Medium Term Note Program

MBL accesses the Australian capital markets through the issuance of negotiable certificates of deposits.

For more information on MBL's wholesale funding programs and program documentation, view MBL Debt programs above.

Liquidity

The MBL liquidity policy outlines the liquidity requirements for the Banking Group.

The key requirement of the policy is that MBL is able to meet all of its liquidity obligations on a daily basis and during a period of liquidity stress: a 12 month period of constrained access to funding markets and with only a limited impact on franchise businesses.

Further information

For MBL's latest funding profile and more information on MBL's fundng and liquidity requirements, view the latest Management Discussion and Analysis, produced in conjunction with the Macquarie Group result announcement.

Macquarie Group Limited and Non-Banking Group

MGL is an ASX-listed diversified financial services holding company with its head office in Sydney, Australia. It is regulated by APRA as the Non-Operating Holding Company (NOHC) of a licensed bank.

MGL provides funding predominately to the Non-Bank Group.

As an Australian Prudential Regulation Authority (APRA) authorised and regulated Non- Operating Holding Company, MGL is required to hold adequate regulatory capital to cover the risks for Macquarie, including the Non-Bank Group. MGL and APRA have agreed a capital adequacy framework for Macquarie, based on APRA’s capital standards for Authorised Deposit-taking Institution (ADI) and Macquarie’s Board-approved Economic Capital Adequacy Model (ECAM).

Macquarie’s capital adequacy framework requires it to maintain minimum regulatory capital requirements calculated as the sum of:

  • The Bank Group’s minimum Tier 1 capital requirement, based on a percentage of risk-weighted assets plus Tier 1 deductions using prevailing APRA ADI Prudential Standards; and
  • The Non-Bank Group capital requirement, calculated using Macquarie’s ECAM. Transactions internal to Macquarie are eliminated.

As at 30 September 2021, Macquarie had regulatory capital of $A29.1 billion, $A11.4 billion1,2 in excess of minimum regulatory capital requirement on a Harmonised Basel III basis3.

Basel III

APRA is requiring Australian banks to follow an accelerated Basel III implementation compared to the Basel Committee’s gradual phase-in of Basel III, with a minimum Common Equity Tier 1 (CET1) ratio of 4.5% required from January 2013 and immediate phase in of additional CET1 deductions. In addition, APRA has added conservative overlays (‘super equivalence’) to the Basel Committee’s Basel III capital requirements.

Macquarie Bank Group’s position at 30 September 2021 meets the APRA’s Basel III requirements, i.e. minimum ratios plus capital conservation buffer.

  1. Calculated at 8.5% of the Bank Group RWA. The 8.5% represents the Basel III minimum Tier 1 ratio of 6% plus 2.5% capital conservation buffer (CCB).
  2. Based on materiality, the countercyclical capital buffer (CCyB) of ~1bps has not been included. The individual CCyB varies by jurisdiction and the Bank Group’s CCyB is calculated as a weighted average based on exposures in different jurisdictions.
  3. Harmonised Basel III relates to the Basel III guidelines defined by the Basel Committee on Banking Supervision, documented in the following: ‘Basel III: a global regulatory framework for more resilient banks and banking systems’, published December 2010 (revised June 2011) by the Bank for International Settlements (BIS) and further updated by BCBS 279 ‘The standardised approach for measuring counterparty credit risk exposures’.
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Ratings agency Short-term rating Long-term rating Latest report
Fitch Ratings F-2 A-/Stable Report
Moody's Investors Service P-2 A3/Stable MGL Report
MFHPL Report
Standard & Poor's A-2 BBB+/Stable Report
Ratings upgrade

MGL has two debt programs:

  • $US20 billion Rule 144A/Regulation S medium Term Note Program
  • $US10 billion multi-instrument Regulation S Debt Instrument Program (DIP)

Securities that may be issued under the DIP include:

  • Euro Commercial Paper
  • Euro Commercial Deposits
  • Euro-Medium Term Notes
  • Senior and subordinated fixed/floating rate notes
  • Transferable Deposits

Download documents for most recent DIP offering.

Documents Incorporated by Reference

Financial Statements

MGL DIP previous terms and conditions set out on:

MGL Constitution

Funding

Reflecting the longer-term nature of the Non-Banking Group asset profile, MGL is funded predominantly with a mixture of capital and long term wholesale funding.

MGL’s debt funding includes:

Wholesale funding programs:

  • $US20 billion Rule 144A/Regulation S medium Term Note Program
  • $US10 billion multi-instrument Regulation S Debt Program (DIP)

For more information on MGL's wholesale funding programs and program documentation, view MGL Debt programs above.

Liquidity

The MGL liquidity policy outlines the liquidity requirements for the Non-Banking Group.

The key requirement of the policy is that MGL is able to meet all of its liquidity obligations on a daily basis and during a period of liquidity stress - defined as a 12 month period with no access to funding markets - and with only a limited impact on franchise businesses.

Further information

For MGL's latest funding profile and more information on MGL's funding and liquidity requirements view the latest Management Discussion and Analysis, produced in conjunction with the Macquarie Group result announcement.

Debt investor presentation

Investors

Unsecured funding

 

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