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 based on APRA’s capital standards for Authorised Deposit-taking Institutions (ADIs) 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 is calculated using Macquarie’s ECAM.
Transactions internal to Macquarie are eliminated.
As at 31 December 2024, Macquarie has $A8.5 billion1,2 in excess of its minimum regulatory capital requirement.
Basel III
The minimum requirement for the Tier 1 capital ratio in accordance with Prudential Standard APS 110 Capital Adequacy is 10.5%. This includes the industry minimum Tier 1 requirement of 6%, capital conservation buffer (CCB) of 3.75% and a countercyclical capital buffer (CCyB)2. In addition, APRA may impose ADI-specific minimum ratios which may be higher than these levels.
Macquarie Bank Group’s capital position is above the regulatory minimum required by APRA.
- The capital surplus shown is above regulatory minimums, calculated at 10.5% of the Bank Group RWA. This includes the industry minimum Tier 1 requirement of 6%, CCB of 3.75% and a CCyB.
- The CCyB of the Bank Group as at 31 December 2024 is 0.76%, which is rounded to 0.75% for presentation purposes. The individual CCyB varies by jurisdiction and the Bank Group CCyB is calculated as a weighted average based on exposures in different jurisdictions at period end.
