Canada remains as the last outpost in Macquarie Bank's once globally ambitious mortgage business after the group announced yesterday that it had sold its Italian operation.In a statement issued yesterday Macquarie said it had signed an agreement to sell its portfolio of Italian mortgages in a transaction that would be completed on October 31.A spokesperson for the group said Macquarie staff were moving to the new owner, not that the bank was confirming the identity of the buyer.As a result of the sale Macquarie will book a net charge of about $70 million, reflecting the write-off of loan acquisition costs and a loss on the sale of the portfolio. The loss is equal to about four per cent of Macquarie's profit in the year to March 2008 and is unusual, and perhaps even exceptional, given that it may represent the single largest loss incurred by any of the group's business units.The Italian portfolio has a book value of €1.1 billion. Italy was the only European market in which Macquarie operated a mortgage business.Citing increased funding costs, Macquarie announced in March that it would cut back on mortgage sales in Australia. It has continued to service its customer base of 90,000.In the same month the group announced that its US subsidiary Macquarie Mortgages Inc of Jacksonville, Florida, would stop taking applications for new loans.In May the group suspended sales of its reverse mortgage product, Silver Living.Macquarie's Canadian subsidiary continues because it is able to take advantage of government support for the RMBS market to raise funds at an acceptable cost.The fact that the group has kept the doors open in Canada and continues to service its local customer base (despite approaches from third-party servicing companies) suggests that Macquarie has plans for a revival in the mortgage market when capital market conditions allow.