Macquarie Group is looking for ways to reduce its level of surplus capital and so help prop up the lacklustre returns of the organisation, whose level of profitability remains less than half that reported prior to the financial crisis of 2008.The return on equity for Macquarie in the year to March 2011 was 8.8 per cent, down from 10.1 per cent in 2010. The trend is better when viewed on the basis of half-year profits, with the ROE back to 10.2 per cent in the March 2011 half.The group puts its level of surplus capital at A$3.0 billion at March 2011, down $200 million from December but still a little higher than in September.One short-term measure for reducing the level of surplus capital is to bump up the dividend payout ratio. Macquarie's final dividend, of 84 cents a share, takes its payout ratio to 67 per cent. The stated policy of the board is to pay out between 50 and 60 per cent of profits as dividends.Greg Ward, chief financial officer, told an investor briefing on Friday, "I don't see the surplus going down in a material sense. "There's pretty simply capacity there for the occasional sort of acquisition or something more strategic.  "How low could that go?  You're not going to see our surplus go below two [billion dollars] that's for certain; because we want to keep quite a buffer there in terms of regulatory change and so forth."At this point in time, there are plans to take it in that particular direction, if you see my point.  "I wouldn't be surprised at all if the surplus is still close to three [billion dollars] in the half year."Management indicated the group may take until it reports the half-year result, in another six months, before it can give clear guidance on the impact of the regulatory changes affecting capital and liquidity under the rubric of Basel III.Ward said: "Overall, our assessment is that we do have sufficient capital to meet the requirements and we should be okay on the leverage ratio requirements as well."He said there was "just a little bit of uncertainty on this net stable funding ratio, the way that'll be implemented here in terms of Australian banks, but we expect to be well placed. "Pressed by one analyst for an estimate on the core tier-one ratio, based on the rulings of offshore bank regulators, Ward remained cautious."APRA may not necessarily do that [the same as other regulators] in terms of their treatment.  "The other complication we have, of course, is that we're a conglomerate group. We're not just a bank, so it's kind of like we know half the puzzle, we don't know the other half, and they're a lot less advanced in their thinking around regulation of conglomerate groups.  And so it just feels a little bit premature."Our thought process is we've run sensitivities around different treatments, we've had discussion papers as to where we think they might end up, and that gives us greater confidence