THE fallout from the financial crunch affecting the US investment banks sent stock in the revamped Macquarie Bank group sliding by 5 per cent yesterday.

Shares in the newly named Macquarie Group, which now contains its investment banking operations and its specialist funds that have driven its recent growth, ended the day at $78, a fall of $4.25 after they began trading at $82.25.

In contrast, the "old" MBL business that encompasses its deposit-taking, equities and foreign exchange divisions, saw its stock hold steady at $82.30 on almost non-existent volumes as investors focused on the new group's structure.

Macquarie has undergone a long and complex process to unwind its various activities into two distinct operations, given the need to maintain large amounts of capital in its deposit-taking arm was holding back growth in the more profitable investment banking side.

But that split coincided with the fallout from the US subprime loans crisis which has exposed the balance sheet weaknesses of the much bigger North American investment banks, such as Merrill Lynch and Citigroup with which Macquarie is now compared by investors.

The shares of the old Macquarie Bank have fallen as low as $63 in recent months as a result of the sector's troubles after hitting almost $100 in May on the back of rising profitability.

Before the creation of the new Macquarie group, the stock had recovered around $22 of that fall before yesterday's latest tumble in the share price.