A $100 million governance overlay has been applied to Macquarie Group after the Australian Prudential Regulation Authority (APRA) found it had miscalculated the capital required for its non-bank businesses, in a breach dating back to 2019.
The regulator announced the action on 6 November 2026, the same day Macquarie reported its half-year results, which showed its home loan book growing 9% to $198.2 billion. APRA said the breach of the group’s Non-Operating Holding Company (NOHC) authority, the licence condition that governs how the parent of a regulated bank is structured and capitalised, left required capital for the non-bank arm too low. However, it stressed that the financial stability of the group, including Macquarie Bank, was never undermined.
The new overlay sits on top of a $500 million capital overlay APRA applied to Macquarie Bank in 2021 over earlier prudential breaches, which remained in place even after APRA eased some of the bank’s liquidity requirements. Both can only be removed with APRA’s approval.
Macquarie has since corrected the understatement. APRA will now oversee a full assessment of the group’s Economic Capital Model, which it uses to set required capital for its non-bank businesses, and said it may take further action depending on the findings.
APRA deputy chair Therese McCarthy Hockey (pictured) said the breach reflected a serious failure in the group’s governance and assurance processes.
“Macquarie failed to identify and address this issue through its own governance and assurance processes, which falls short of APRA’s expectations,” she said in a media release.
McCarthy Hockey acknowledged Macquarie’s cooperation but said fixing a problem after it is found doesn’t lessen the failure behind it.
“Board and senior executives are responsible for ensuring their institutions maintain effective risk management, assurance and governance practices that support compliance, not simply react when deficiencies are identified,” she said.
The action comes as APRA prepares to review all existing NOHC authorisations, to make sure they adequately address risks arising from group structures and activities.
For brokers, the issue sits at group level and relates to the non-bank businesses. APRA has confirmed that the stability of Macquarie Bank, the group’s home lending arm, was not undermined. Macquarie’s half-year result, released the same day, showed its bank’s Common Equity Tier 1 (CET1) capital ratio, a key measure of core financial strength, at 12.9%, above APRA’s requirements.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
