Big corporates strong growth story for ANZ’s Asian business

Revenue per major customer grows exponentially as that customer is banked across multiple countries, reinforcing the fundamentals of ANZ’s super regional strategy.

ANZ’s managing director of global banking, Sameer Sawhney, said that result emphasised the importance of building greater regional connectivity but also demonstrated the value customers saw in dealing with the same bank across borders.

“This is really a remarkable story,” he said at ANZ’s Asia Investor Tour in Hong Kong.

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Global banking sits at the apex of ANZ’s International and Institutional Banking (IIB) division, representing just 8 per cent of IIB customers but generating almost half the revenue and housing half the assets.

Those customers fall into four broad industry buckets: resources, energy and infrastructure; global diversified industries; banks and diversified financials; and funds and insurance.

“These customers have massive wallets but complex needs,” Sawhney said. “They are in multiple parts of the world and they need long term banking partners.”

He added for these customers, especially those in financial services, ANZ’s AA-rating was critical but the rating was increasingly important for government businesses too.

“That rating is very important but it is not enough, you also have to have very good regional presence,” Sawhney said. “Clients such as these typically want two or three regional banks in their relationship and some local banks. They want you to really know their industry and what they are doing. The relationship really needs to be CEO to CEO.”

ANZ’s Global head of resources, energy and infrastructure Will Rathvon ran through some major resource projects in the global sector, including the largest project financing ever done, the $20 billion deal for the Ichthys LNG development off the Northern Territory.

Although the project was being sponsored by Japanese and European companies with traditionally strong links to national banks, ANZ was able to pull together a senior delegation to demonstrate both technical expertise in products like project and export finance and foreign exchange.

Critical to winning the mandate was also the ability to commit support over the long term, in advance, at a time after the financial crisis when European banks in particular were withdrawing.

“In cases like this, often times the national banks have the central role but we were able to bring to the table a track record, insight, execution and innovation at a time when European banks were under pressure,” Rathvon said.

At the other end of the IIB business – although there is considerable overlap between global companies and individuals – is ANZ’s retail business.

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Individual wealth in Asia is growing at more than double the global rate and will become the largest personal wealth region by 2017, underpinning ANZ’s push into affluent retail banking in the region, according to The Boston Consulting Group.

ANZ managing director Retail Banking Asia Pacific Sanjoy Sen told the tour that underpins steady growth in customer deposits and assets under management and strong growth in lending assets.

Customer deposits and assets under management have grown at a compound annual growth rate of 18 per cent between March 2012 and March 2013 to $17.8 billion. Net loans and advances in the business meanwhile had grown at a compound 35 per cent to $7.9 billion.

Sen said the retail business, while relatively niche and focussed on organic growth, contributed liquidity, brand exposure and connectivity.

“We also have a unique offering for other country’s customers to invest in Singapore and Hong Kong – the two main hubs of Asia’s financial sector,” he said.

Central to the affluent and emerging affluent proposition was a digital proposition, not just because of ANZ’s limited footprint but because of the demands of sophisticated Asian customers.

“That capability is also significantly improving our distribution capability in the Pacific too,” Sen said.

The business is showing improving revenue per full time employee, up 12 per cent from the first half of 2013 to the first half of 2014 to $216,000. There is also accelerating growth in customers from 95,000 to 108,000 over the same period.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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