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Macquarie Group (MQG) flags $1.57bn hit on banking reforms

By Mensholong Lepcha

03:31, 30 November 2021

Macquarie Group headquarters in Australia
Macquarie Group headquarters in Australia – Photo: Shutterstock

Australian financial conglomerate Macquarie Group flagged an AUD2.2bn ($1.57bn) hit to its surplus capital due to increases in regulatory capital buffers as outlined in the nation’s banking regulator’s latest reforms.

The Australian Prudential Regulation Authority (APRA) on Monday released its new bank capital framework which requires banks to ensure existing high levels of capital adequacy are maintained.

“The framework, developed over four years of consultation, will help to ensure Australian banks continue to have the financial strength to withstand future adverse economic conditions, ensuring depositors are protected and lending is supported,” said APRA in a statement.

APRA to consult industry 

Macquarie added on Tuesday that the APRA will consult with the industry prior to the 1 January 2023 implementation date, and therefore the final impact on Macquarie’s capital position will depend on the outcome of APRA’s consultation process and Macquarie’s business and geographic mix.

APRA’s revision to the capital framework includes a minimum common equity tier 1 capital ratio of 10.25% and an enhanced risk sensitivity to residential mortgage and commercial property loans.

“Macquarie Group’s capital surplus has included a provision for these regulatory changes for some time and it remains Macquarie’s expectation that it will have sufficient capital to accommodate these additional regulatory capital requirements,” said the company in a statement.


41,951.75 Price
+5.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Oil - Crude

73.34 Price
-1.550% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee -0.0019%
Overnight fee time 22:00 (UTC)
Spread 0.030


0.64 Price
+0.430% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


15,815.40 Price
-1.100% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

CBA to disclose impact later

Australia’s largest bank, Commonwealth Bank of Australia, said on Tuesday that it will provide an update on the final impact of the new capital framework at its full-year results presentation.

“Although Australia’s banking sector is already strongly capitalised by international standards, the new capital framework will help ensure it stays that way,” said APRA chair Wayne Byres, while adding that the new capital framework will ensure that Australia is compliant with the internationally agreed Basel III framework, due 2023.

In a separate release, Macquarie announced that it raised AUD1.3bn by issuing about 6.8 million shares at the price of AUD191.28 per share.

Macquarie stock up on Tuesday 

The company added that the funds raised will “provide additional flexibility to invest in new opportunities...while maintaining an appropriate capital surplus.”

Shares in Macquarie Group rose 2.1% to AUD198.15 by Tuesday afternoon. The S&P/ASX 200 Financials index rose 1% to 6,327.10 on Tuesday.

Read more: Aussie travel tech firm Alloggio recovers from weak IPO debut

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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