Australia's ANZ to expand in China as Asia strategy evolves

[SYDNEY] Australia and New Zealand Banking Group will expand its customer base in China and lengthen the tenure of loans to its top customers as part of the"evolution" of its Asia strategy, a senior executive said on Tuesday.

Australia's No 4 lender kick-started its regional strategy in 2007 under CEO Mike Smith, who announced his retirement this month. Incoming CEO Shayne Elliott, who takes on the reins next year, has said the strategy needs to evolve.

ANZ International and Institutional Banking CEO Andrew Geczy said the "strategy evolution" would include issuing longer-term loans and engaging new borrowers in China that are not "just the very, very top state-owned enterprises and the top multinationals".

The country currently accounts for about 3 per cent of ANZ's total outstanding loans, and of those, 88 per cent are for less than a year, according to public filings.

ANZ has a small retail presence in China but its growth in the world's second-biggest economy depends on lending to top institutions, cash management and trade finance. It will also focus on advisory and market-making activities, Mr Geczy added.

ANZ is among the top four global banks in Asia-Pacific, according to the Greenwich survey. But while it is ranked No 5 for arranging loans in Asia Pacific ex-Japan so far this year, it falls to ninth place when Australia is excluded, according to Thomson Reuters data.

Although the bank has built a reasonably strong position in Asia its strategy has come under fire for its low returns. Cut-throat competition, a lack of local expertise and slim margins have proved to be formidable challenges.

ANZ has also said it will push harder into the lucrative mortgage market at home, where growth is faster and returns attractive.

REUTERS