The sale of our retail and wealth businesses in Asia has left the institutional arm well positioned for growth - allowing a greater focus on customers with trade and capital flows in the region.
"Customers are recognising we have an offering that’s different to our competitors.”
ANZ’s institutional bank is now big enough to be relevant but small enough to be responsive to our customers and better able to build on our strong relationships.
Customers are recognising we have an offering that’s different to our competitors. We’re the leading bank in loan syndications in Asia-Pacific excluding Japan, and in transaction banking we have won more than 25 major multijurisdictional mandates in the last 12 months.
In addition, ANZ topped the Australian dollar bond league tables in 2018. We were involved in significant transactions including a $US500 million sustainability-linked revolving credit facility for major food producer Olam and a $US750m bond issue for Chinese tech company Lenovo.
ANZ also played a role on the largest consent solicitation in the Asia Pacific — a $US8.1 billion deal to help ICBC Financial Leasing in Hong Kong gain greater flexibility over their aviation leasing assets.
For us winning the Asian Bank of the Year award from IFR Asia for 2018 is proof the Asian strategy is alive and well. People thought we were exiting Asia and that’s another proof point that’s just not the case.
We’ve seen wider recognition too: ANZ holds top rankings for relationship quality in both Australia and New Zealand, according to Peter Lee Associates, and Asia, according to Greenwich Associates.
Such recognition is the culmination of a three-year strategy to refocus the institutional bank on its core strengths and key customers and our exit from commercial and retail banking in Asia was a core component of that refocus.
We did an analysis of our customer base and found there were a number of clients who stood out where we created value for them - and they for us. They were predominantly those who dealt with us either in Australia or New Zealand and one or more of our Asian network countries.
The consequence of that analysis was we made the decision to exit almost two-thirds of our customer base so we could better concentrate on 8,000 customers in key growth areas across the region. Those clients are looking for industry expertise from ANZ’s institutional bankers and are in priority sectors where the bank is seeing sectoral growth, — financial services, resources, agriculture, property, technology and government.
We want to pivot to growth with the same discipline that we shrank the business previously.
We are also rapidly growing our sustainability business which is fundamentally a bet on the future.
Our industry knowledge is a key hook for our customers, they like talking to people who understand their business.
Another key pillar of ANZ’s strategy has been to invest heavily in operational excellence. We have responded to client demands for a simplified customer interface that enables self-service and allows dealing on a 24/7 basis. We will increasingly use automation to improve efficiencies.
More than 30 per cent of our trade processing documentation work is automated – and that also supports improved financial crime detection and increases access to international trade finance. We do expect that part of the business to eventually become fully automated.
ANZ is also helping drive the innovation agenda in the region as the only Australian bank in two separate international consortia aimed at streamlining global trade.
In Singapore ANZ is one of nine global banks working on a ‘one-stop shop’ trade and logistics ecosystem known as the Networked Trade Platform. That platform will enable the digitisation of the trade supply chain from freight, financing and customs and through to payment reconciliation.
ANZ is also working with the Hong Kong Monetary Authority on a blockchain-based platform similarly designed to reduce trade bottlenecks.
With work taking place both internally and externally on improving productivity, in the not-too-distant future the whole trade and trade finance ecosystem will be transformed.
The positives for our customers, including a much quicker turnaround time are enormous.
Big data has also become a strategic priority for the bank as we tap into the business opportunity presented by our vast payments network. ANZ recently announced it is working with Google Cloud to de-identify aggregated data 250 times faster than before – allowing the bank to share business insights with clients to help them improve their products and services.
I think our three-year strategy of building a leaner, more agile and focused business with technology at the core couldn’t have come at a better time given the global headwinds buffeting the region.
With quantitative easing from central banks unwinding and the prospect of a trade war, accompanied by a slowing of growth in China, we are positioning ourselves as a standout competitor in the region as the fight for business is hotting up.
We have invested in dealing rooms in Singapore, Hong Kong and China so we now have five full-service operations when added to home bases Australia and New Zealand. Those hub offices serve 15 markets in total in Asia, with 34 countries served by the bank overall.
In August, ANZ was authorised to receive a Japanese securities licence, enabling it to distribute bonds into that market. ANZ also offers market-leading cash management and transaction banking services in Japan.
The strength of our core banking services and strong deposit base in Australia and New Zealand underpins our bank’s AA rating and that gives us access to capital as liquidity comes out of the market.
We are also keen to continue to build on partnerships with Australia’s massive superannuation funds. I think there is a greater opportunity for us to work closely and partner on major projects.
While we are a strong competitor we’re also ready to form valuable partnerships, whether with other banks in the region, tech companies or governments. Ultimately it is all about serving the customer’s needs.
It’s about being focused, doing more with less, and building deeper relationships that create value. It’s not rocket science - it’s actually just being disciplined in the execution.
Mark Whelan is Group Executive – Institutional at ANZ.
Whelan recently spoke with regional journalists in Hong Kong on the institutional bank’s focus and ambition in the region.