The government’s major bank levy is likely to have “unintended and disproportionate” consequences on Macquarie's local earnings given the group’s “unique” mix of banking and non-banking services.
The major bank levy announced in the federal budget would be approximately 11 per cent of Macquarie Bank's Australian earnings and around 4 per cent of its global earnings, according to a statement by the bank.
Macquarie released the statement in response to speculation published in The Australian Financial Review that the bank is considering relocating its Australian operations to Singapore to avoid paying the levy.
Macquarie is the only bank alongside the 'big four' to be affected by the levy.
The bank noted that its retail banking business carried out in the group's Banking and Financial Services Group, which contributes 11 per cent of operating group profits, is the eighth largest mortgage lender in Australia and represents approximately 2 per cent of the Australian market.
Only one-third of Macquarie's earnings are generated in Australia, according to the statement.
Approximately half of Macquarie Group's earnings are derived from its banking subsidiary Macquarie Bank, which operates in Australia and internationally.
"Macquarie’s ... funds management activities, corporate advisory businesses and broking activities are largely carried on outside Macquarie Bank Limited," said the statement.
"On the information available, and based on the most recent financial accounts, the levy is estimated to be approximately 11 per cent of Macquarie Bank Limited’s Australian earnings and approximately 4 per cent of its global earnings.
"Expressed another way, this represents a potential increase in Macquarie Bank Limited’s Australian tax rate from 34 per cent to 41 per cent."
As a result, the scale of Macquarie Bank's international and wholesale businesses means the levy "may have unintended and disproportionate consequences on its local earnings", said the statement.
Macquarie said the impact of the levy is "still unclear", and noted that the standard for the calculation of the levy is yet to be determined by APRA.
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