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ANZ refocuses Asia operations; sells retail, wealth arms; concentration on institutional

ANZ will concentrate its resources on institutional banking in Asia with the sale of a portfolio of retail and wealth management assets to Singapore-based DBS.

The bank’s chief executive Shayne Elliott told BlueNotes on video from Hong Kong the move followed an extensive review of ANZ’s mix of businesses in the region and was part of focussing more intensively on returns and markets where ANZ had a competitive advantage.

"All good businesses continue to sharpen their focus [on] where you’re winning, where you’re doing well."
Shayne Elliott, ANZ CEO

“It is all about focus,” Elliott said. “It is a profitable business. Actually it’s a good little business…. but the world’s changed and the rules of operating have changed. It’s become much more complex.”

ANZ refocuses Asia operations; sells retail, wealth arms

He emphasised the sale did not affect ANZ’s commitment to Asia but intensified the resources available to win business in core areas like trade finance, debt capital markets and cash management. Restructuring of the institutional bank itself had the same intention.

“All good businesses continue to sharpen their focus [on] where you’re winning, where you’re doing well,” Elliott said.

The retail and wealth business being sold includes around $A11 billion in loans, $A7 billion in credit risk weighted assets and $A17 billion in deposits. In the 2016 financial year, the business accounted for approximately $A825 million in revenue and net profit of around $A50 million.

While the sale price reflects a premium to net tangible assets of approximately $A110 million Elliott said the complexities of restructuring, software write-downs and unwinding the business would result in a net loss of around $A265 million.

Elliott said it was essential in the current banking climate of lower growth, more regulation and regulatory capital and intense competition to maximise resources – financial and human capital – in businesses that offered the best return on investment.

Being sold are retail and wealth in Singapore, Hong Kong, China, Taiwan and Indonesia and DBS intends to invest in and run them as ongoing operations.

“The world view (before the crisis) was regulators around the world were harmonising and that makes it relatively easier to run a regional platform because the rules are the same…in recent times that’s not the case,” Elliott said.

The five countries involved are individual sales and some other countries in the region, particularly Vietnam, are still under review in the retail and wealth business.

For more on ANZ’s Asian strategy and outlook for other non-core businesses, watch the video above.

Paul Edwards is Group General Manager, Corporate Communications at ANZ and Publisher at BlueNotes

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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