Sell-offs follow write-downs for Macquarie

Macquarie Group has embarked on an asset disposal program to remove $15 billion of funded assets from its balance sheet. It has made $3.9 billion of sales and plans to have the program completed by the end of its financial year, that is by March 2009.

Macquarie's balance sheet shows assets of $167 billion and the group says that of those assets $76.4 billion actually requires funding (many of the rest are "self funding"). The aim of the asset sales is to bring the value of funded assets down to around $50 billion.

The group has already sold $900 million of external warehousing of Australian and Canadian mortgages, and $2.7 billion of Macquarie Securities Group trading assets.

The sale of the $2 billion Italian mortgage business was completed after the September 30 interim balance date.

Still to go are a $1.1 billion auto lease and equipment finance warehouse, a $2.9 billion margin lending book, $400 million of real estate investments, including the Hong Kong assets of Macquarie Goodman Asia, and another $2.3 billion of Macquarie Securities Group trading assets.

Macquarie has equity of $10.3 billion, which is $3.3 billion in excess of its minimum capital requirement, and cash and liquids of $23.6 billion. Since March 31 it has raised term funding of $7.8 billion.

Macquarie chief financial officer Greg Ward said he was confident that the bank could meet its ongoing funding requirements. The average term to maturity is 3.6 years, a slight improvement over the last six months, and less than $4 billion of term funding is maturing over the next two years.