ANZ: Special focus
Criminal cartel charges has turned a three-year-old ANZ share placement from being just another reputational headache in Australian banking to something that has bankers seriously alarmed.
June 4, 2018
Australia is used to regulatory and reputational calamity, but a case against ANZ, Citi and Deutsche has taken a more personal turn.
6 March 2017
The considerable wealth of Mike Smith, former ANZ CEO and long-time HSBC globetrotter, is a subject of some contention among Australian investors who feel he earned a ton of cash for eroding shareholder value during his time at the helm of the Australian bank.
31 October 2016
Euromoney predicted last month that ANZ would sell its retail and wealth management businesses to a Singaporean bank; it turns out it was already in the works. Both DBS and ANZ gain from a practical deal, though it won’t be quite as simple as it looks
Shayne Elliott’s tenure as CEO of ANZ has already been marked by several strategic initiatives since he took the top job in January. None is more striking than the apparent reversal of his predecessor’s grand ambitions for Asia. Is there method in the madness of undoing years of expensive effort? And can a renewed focus on Australia deliver growth when some say the domestic industry is past its peak?
The multi-decade period of extraordinary plenty for Australia’s big four banks may be at an end.
ANZ is looking for buyers for parts of its Asia business; expect local buyers to be writing cheques again.
The word 'Asia’ appeared sparingly in ANZ’s first half results on Tuesday, and when it did, its connotations were overwhelmingly negative. Shayne Elliott, the new CEO delivering his first earnings report to a Melbourne room full of analysts, first mentioned the world’s largest and most populous continent in the context of "tough decisions" he had had to make. One of these was a revaluation of the bank’s investment in Malaysia’s AmBank, a A$260 million impairment in recognition of the tanking Malaysian economy.
In November, ANZ announced it would downgrade some of its vanilla Asia trade-finance operations and focus on higher-returning products, such as supply-chain finance, after consecutive quarters of margin compression.
"Over the last decade ANZ has pushed into the Asian market in a way that has been unmatched by other domestic banks. This needs a solid approach to the business, it is not possible to move out rapidly across a whole geography without having aligned partners, resources and technology to support it."
ANZ’s Liu also says the precipitous slide in stock prices since mid-June was "due to an overall lack of hunger for transparency and reform. China needs to accelerate reforms of SOEs and state-run banks. That’s the only way to create a strong equity market capable of attracting and retaining the interest of all manner of investors. My hope is that the recent market rout has forced authorities to engage in proper reform measures, openly, publicly and honestly."
One of the ways in which ANZ differentiates itself is the expertise it has in its home markets, according to Faruqui. "If there is a client in Asia that does business in Australia and New Zealand, where we are a substantial player, we have to dominate that corridor to make sure we provide full banking services end-to-end."
"If ANZ has to hold unquestionably strong levels of capital, it will become increasingly difficult for it to compete in Asia," says one Sydney-based analyst. "If you’re a CBA or a Westpac and you’re told to hold more capital, you can move your deposit rates down a little or re-price your domestic loan book. But if you’re ANZ, you can’t go to Samsung or Hutchison and say you’re hiking your trade finance pricing by 20 basis points because your local regulator wants you to hold more capital. You can re-price in a closed market, but not in an open one like Asia."