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Macquarie hedges on levy dislocation

05 June 2017 4:27PM
Macquarie Group expects the Major Bank Levy on liabilities to affect its profit by around A$90 million, the group outlined late on Friday.A report in the Financial Review on Friday morning - centred on scenario planning by management and the board leaning toward a shift in the group's domicile from Australia to Singapore - prompted Macquarie to end a studied, month-long silence on the levy, which was first outlined in last month's budget.In careful language Macquarie said it "notes speculation in today's Australian Financial Review regarding the implications of the Major Bank Levy on Macquarie Group Limited."The impact on Macquarie Group is still unclear," it said.The remainder of its statement evaded any rebuttal of the central point of the AFR's article, but concluded:"The scale of Macquarie Bank Limited's international and wholesale businesses means the levy may have unintended and disproportionate consequences on its local earnings."Macquarie elaborated that "on the information available … the levy is estimated to be approximately 11 per cent of Macquarie Bank Limited's Australian earnings and approximately four 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."

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