Macquarie divides and grows

Macquarie bank has received approval from the Australian prudential Regulatory Authority to split its business into banking and non-banking subsidiaries. A new holding company Macquarie Group is to be created which is expected to free up the bank's capital and boost its international operations which already generate almost half of its $7.2 billion annual income. The holding company has raised $8 billion in funding which it will use to buy the investment banking business and other non-banking activities from Macquarie Bank, giving the banking arm additional funds to shore up its regulatory capital. Macquarie shares closed 9.3 per cent higher yesterday at $70.75.