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  • Macquarie Group (MQG) anticipates a $2.2 billion hit to its capital surplus after the financial regulator announced changes to the bank capital framework
  • The Australian Prudential Regulation Authority (APRA) new framework aims to ensure all banks have the financial strength to withstand future economic crises
  • Under the changes, APRA will require Australian lenders to hold higher levels of capital for ‘risky’ interest only loans
  • Macquarie is the first bank to outline how the changes may impact it’s bottom line, with Commonwealth Bank (CBA) and Westpac (WBC) stating they’ll outline the impact in mid-2022

Macquarie Group (MQG) is anticipating a $2.2 billion hit to its capital surplus for after the financial regulator announced changes to the bank capital framework.

The Australian Prudential Regulation Authority’s (APRA) new bank capital framework aims to ensure all banks have the financial strength to withstand future economic shocks.

The new framework won’t require banks to hold additional levels of capital, as banks already meet the threshold.

However, APRA will require Australian lenders to hold higher levels of capital for ‘risky’ interest only loans — typically favoured by property investors.

Macquarie is the first bank to outline how the new regulation may impact its bottom line, though it clarified that the impact was subject to change.

In a statement released to the market, the ASX-50 lister said “based on the current information available, the pro forma impact on Macquarie Group’s capital surplus above regulatory minimums as at 30 September 2021 is estimated to be around $A2.2 billion.”

MQG noted its capital surplus has included a “provision for these regulatory changes for some time” and the company believes it will have “sufficient capital to accommodate these additional regulatory capital requirements”.

Fellow big banks Commonwealth Bank (CBA) and Westpac (WBC) have stated they’ll need additional time to calculate the impact of the changes, with an update due to be released in mid-2022.

National Australia Bank (NAB) and ANZ (ANZ) have yet to respond to the changes.

MQG by the numbers
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