Shares in Macquarie Group, Australia's biggest investment bank, fell on its trading debut as a new company on Monday, following the completion of a restructuring aimed at accelerating its global growth.
Macquarie Group, a non-operating holding company, started trading at A$82.25, replacing its previous listing as Macquarie Bank Ltd which ended on Friday at A$82.30. But it later fell as much as 4 percent to a low of A$79.0 as global credit worries kicked in.
Macquarie Group, which will contain separate banking and non-banking groups to be run as independent companies, would be subject to fewer regulations by virtue of its limited activities with less intensive supervision than if it were a bank.
The restructure will result in the transfer of a large part of Macquarie Bank's non-banking activities to the newly formed non-banking group under Macquarie Group.
In the morning session, Macquarie Group shares were down 3.8 percent at A$79.21, while the benchmark S&P/ASX 200 Index was down 1.1 percent, with more bad news on writedowns at U.S. investment banks hurting sentiment for Australian financial stocks.
Under the new structure, Macquarie Group will be regulated as a non-operating holding company by Australia's banking regulator, giving Macquarie more flexibility to expand its fast-growing global funds management and investment banking businesses.
Previously, Australia's banking rules had restricted the bank's exposure to certain subsidiaries, such as those undertaking stockbroking, investment banking and funds management.
Macquarie manages about A$200 billion (US$183 billion) worth of assets globally, from toll roads to airports to real estate. Macquarie acquires these assets and bundles them into listed and unlisted funds from which it earns management fees.
The need to restructure was prompted by the fact that Macquarie earns more than half of its revenues outside Australia, with growth in recent years driven by activities which are not considered traditional banking.
Macquarie Group has obtained A$18 billion in debt facilities to transfer non-banking assets and businesses from Macquarie Bank. About A$10 billion is being provided by Macquarie Bank as a bridging loan.
Macquarie is scheduled to release its first-half earnings on Nov. 13 and the company has forecast a 40 percent increase in profit from a year ago.
Macquarie started operations as a unit of UK's Hill Samuel & Co in 1970. In 1985, Macquarie received Australian government approval to become the nation's second trading bank and listed on the Australian stock exchange in 1996.