Macquarie prospers despite levy

MACQUARIE Group expects to make another annual profit of around $2.2 billion despite the impact of the Federal Government’s new bank levy.

The banking and financial services group said its performance in the first quarter of its 2017/18 fiscal year, which ends in March, was in line with expectations – stronger than a year ago but weaker than the final quarter of its 2016/17 year.

The company has forecast an annual profit broadly in line with the previous year’s record $2.2 billion.

Speaking at Macquarie’s annual general meeting, chairman Peter Warne said the Federal Government’s bank levy will have an estimated pre-tax annual cost of $66 million, effectively raising Macquarie Bank’s tax rate from 34 per cent to 41 per cent.

“The new tax will have a disproportionately higher impact on Macquarie Bank compared to the major Australian banks given our business mix is more heavily weighted to wholesale and international business,” Mr Warne said.

Approximately one third of Macquarie Bank’s earnings in 2016/17 were generated by its Australian operations, Mr Warne said.

“Given the relatively small size of our Australian banking business we were surprised by our inclusion in the group to pay this levy,” he said.

Mr Moore’s remuneration rose to $18.7 million in 2016/17.

Macquarie shares gained $1.04 to $87.37.

Picture: AARON FRANCIS WORRYING TREND: Coles chief executive John Durkan says Australian households are being forced to buy cheaper alternatives to fresh produce and meat.