While it’s known as investment bank, it now makes the bulk of its profits from asset management - especially infrastructure assets such as toll roads or power stations.

As interest rates have fallen to record lows, pension funds have been scrambling to invest in these assets, inflating their prices. At the same time, Macquarie is seeking to cash in on a massive wave of investment into renewable energy, as the world tries to slash carbon emissions.

Jefferies banking analyst Brian Johnson argues the bank has positioned itself for “megatrends” including climate change and technological change, and these bets have paid off.

“Macquarie have a much longer-term horizon, and they are in the right spots,” he says.

Portfolio manager at Opal Capital Management, Omkar Joshi, says the surge in Macquarie’s share price reflects the bank’s track-record in hunting down new business opportunities in recent years - at the same time as the big four have faced a soft outlook for earnings growth.

“Macquarie’s earnings have been going from strength to strength, and the share price has been following that,” Joshi says.

The big four, meanwhile, have in recent years retreated to their bread and butter of retail and commercial banking, while selling peripheral businesses in wealth management and overseas.

Home loans can be highly profitable - and indeed Macquarie has been growing rapidly in Australian mortgages. But the big four banks’ businesses are heavily influenced by the domestic economy: the pace of credit growth, and whether unemployment is enough of a problem to cause widespread bad debts. While house prices and mortgages have surged this year, there is a growing expectation the boom will cool down in 2022.

So, should it be the big five, instead of the big four?

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It still makes sense to group NAB, ANZ, Westpac and CBA together because they have very similar businesses, they still enjoy a dominant position in the core retail banking market, and they are influenced by the same market conditions.

Macquarie is a different beast as a business. But in the market’s opinion, it is roughly as valuable as a couple of the traditional big four.

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