ANZ eyes Asian assets to expand in region
Bank's chief executive is on the acquisition trail, looking to buy assets with strong ties to Asia as lender sees the region as key growth driver
The Australia and New Zealand Banking Group (ANZ) is looking to buy assets with strong ties to Asia to expand its business on the continent and become a super-regional bank, but its chief executive says the lender will be cautious about acquisitions going forward.
ANZ is the fourth major player in the region after HSBC, Citi and Standard Chartered.
Michael Smith, HSBC's former chief executive in the Asia-Pacific region who got the top job at ANZ in 2007, said they will patiently wait for any Western bank to unload their Asian assets. He believes robust growth in Asia will contribute 25-30 per cent to bank earnings by 2017, from 20 per cent at this time.
"I still believe that a number of them will sell good quality assets," Smith told the . Asian assets may be the last thing they seek to sell, according to Smith, because the Asian assets will be an important source of revenue for the future. "But they may have no choice, because they have to focus very much on getting their domestic operations [right]."
I still believe that a number of [Western banks] will sell good quality assets
The Asian financial system could be larger than the US and Europe combined by 2030 based on continuing reform and deregulation in the region, a recent research report from the bank said. Smith said they expected organic business growth in the region but would be watchful if Western owners are keen to cash in.
The latest sale of Asian assets came from Societe Generale, France's second-largest bank, which sold its private banking arm in Singapore and Hong Kong to DBS for US$220 million this month. That followed the decision by Bank of America to sell its Asia and non-US private banking business to Julius Baer for 860 million Swiss francs (HK$7.55 billion) last year and the Dutch ING Group handing over its Asian private banking operations to Singapore's Oversea-Chinese Banking Corp for US$1.5 billion in 2009.
