Fitch Ratings has revised its outlook on Macquarie Group Limited and its Australian subsidiaries upwards from 'negative' to 'stable'.
The subsidiaries included in the review are Macquarie Bank Limited (MBL), Macquarie Financial Holdings Pty Limited and Macquarie International Finance Limited.
In a statement Fitch explained that "[Macquarie Bank] is the group's main operating subsidiary; the bank's issuer default ratings, viability rating and senior debt rating are underpinned by robust risk controls and a high-quality management team, which has driven a strong financial profile over a number of years.
"These factors offset the greater level of business model complexity, which has a significant level of non-traditional banking operations relative to domestic bank peers, and its higher reliance on wholesale funding compared with some international peers," the ratings agency said.
Fitch has affirmed MBL's issuer default rating as 'A', one notch higher than Macquarie Group Limited, the group's non-operating holding company.
Capital buffers also continued to improve in FY21 despite the weakening operating conditions. Fitch said Macquarie Bank has built a cushion large enough to absorb any shocks arising from earnings deterioration.
MBL's common equity Tier 1 ratio, using the local regulatory framework, increased to 12.6 per cent by FYE21, up from 12.2 per cent a year earlier, and was 16.2 per cent on a globally harmonised basis.