Key points
- APRA penalises Macquarie Group with $100 million.
- The prudential regulator says Macquarie breached capital rules.
- Competitors argued the unique structure gave unfair advantages.
Macquarie Group (ASX:MQG) copped an $100 million capital penalty from the Australian Prudential Regulation Authority for breaching capital requirements across its non-bank businesses.
The new penalty comes on top of an existing $500 million capital overlay applied to Macquarie Bank that has remained in place since 2021.
The regulator stated that the breaches dated back to 2019 and demonstrated that the institution fell short of required risk management standards.
“While APRA acknowledges Macquarie’s co-operation, addressing the breach after identification does not diminish the seriousness of the underlying failure,” said APRA Deputy Chairwoman Therese McCarthy Hockey.
The financial services giant stated that the operational breach did not result in any unfair competitive advantage for its banking division.
Following the announcement, the Macquarie Group share price was down at $258.40.
Competitors such as Commonwealth Bank (ASX:CBA) previously argued that the non-operating holding company structure allowed understated risk exposure measurements.
Macquarie Group has outpaced major competitors in home loan and deposit growth over several years under its unique corporate framework.
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