ANZ’s Asian strategy: Back to the future

Despite a recent sell down of some high-profile Asian holdings, the bank says it remains committed to Asia, is back in growth mode and outward looking

Mark Whelan
Mark Whelan

ANZ's Mark Whelan stressed his bank's ongoing commitment to Asia, and that the new streamlined business focused on institutional banking was already paying dividends.

Whelan is group executive, Institutional and Management Board member responsible for the bank's global institutional business across 15 Asian markets, Europe, America, the Middle East, as well as Papua New Guinea.

Along with other senior bank figures, he was in Singapore for ANZ's inaugural Finance and Treasury Forum and to emphasize the bank's staunch commitment to the region.

In recent years, however, the Melbourne-based bank, under the leadership of CEO, Shayne Elliott, has aggressively reduced its risk weighted assets in Asia, as the chief executive worked to simplify the bank.

ANZ is now concentrating on trade and capital flows between Asean, North Asia and Australia, as these flows represent a sweet spot for the bank, Whelan said at a media round table in Singapore.

Through its ongoing sell down of Asian holdings, including high-profile wealth and retail units, ANZ was seen as shrinking its Asian footprint. However, the bank is now back in growth mode, reverting to the original business it carved out in Asia decades ago, institutional banking, and is investing in its operations in the sector.

Whelan was keen to emphasize his bank was still the most outward looking of Australia's biggest four banks, citing its 50-year track record in Japan and 44 years in Singapore as tangible examples.

The steady divestment of non-core businesses started in October 2016 when ANZ agreed to sell its wealth management and retail banking business in Singapore, Hong Kong, Indonesia, China and Taiwan to Singapore's DBS Bank.

That was followed by the sale of its 20% stake in Shanghai Rural Commercial Bank for A$1.84 billion. Then, in April 2017, the bank offloaded its retail business in Vietnam to Shinhan Bank.

Earlier this year ANZ also sold its retail, commercial and small-medium sized enterprise banking businesses in Papua New Guinea to Kina Bank and also its 55% stake in Cambodian joint venture ANZ Royal Bank to J Trust, a Japanese diversified financial holding company.

The Aussie lender is reported to be sounding out buyers for its 38.8% holding in Indonesian bank, PT Bank Pan Indonesia.

The Asian exit may have been even more dramatic had the proposed merger mooted in August 2017 between Malaysian banks RHB Bank and AmBank not been abandoned.

Their potential union would have offered ANZ an opportunity to dispose of its 23.8% stake in AmBank.

In the meantime, that shareholding is still garnering a lot of interest and ANZ has an ongoing dialogue with interested parties on the sale of the asset, which Whelan says is performing well.

An indication of the bank's renewed push back into Asia was the granting of a securities license in Japan. This allows it to sell Australian, New Zealand and Asian bonds, as well as structured notes, repurchase agreements and other securities products to Japanese investors.

"We expect steady growth for our Japan business over the next three years, particularly following the approval of the securities license which broadens our product offering to Japanese investors. We have been operating in Japan for more than 50 years and will continue to invest in countries or products that support our institutional customers with trade and capital flows in the region," Whelan told The Asset.