Australia & New Zealand Banking Group (ANZ) said it is to sell its retail and wealth-management businesses in five countries in Asia to Singapore’s DBS Bank, to focus instead on institutional banking in the region, as it looks to “focus on attractive areas” in the market in which it is able to “carve out winning positions”.
In walking away from Asia’s retail banking sector, ANZ is seen as following in the footsteps of another non-Asian multi-national banking group, Barclays, which earlier this year sold its private banking business in Singapore and Hong Kong to OCBC as part of OCBC. In 2014, France’s Société Générale sold its Asian private banking operations to DBS.
The purchase price wasn’t disclosed, but in a statement on Monday, ANZ said the deal represented an estimated premium to net tangible assets at completion of about A$110m (US$83.58m, £68.76m), and that it expected to take a net loss of around A$256m on the sale, including write-downs of software, goodwill and fixed assets.
Subject to regulatory approvals in each of the relevant markets, ANZ said, it expected the sale of its retail and wealth businesses in Singapore, Hong Kong, China, Taiwan and Indonesia “to be completed during 2017 and early 2018”. The businesses being sold include around A$11bn in gross loans and A$17bn in deposits, ANZ added.
In the statement, ANZ chief executive officer Shayne Elliott stressed that Asia still “remains core to ANZ’s strategy”.
But he noted that the planned sale of the Melbourne-based, Australia- and New Zealand- listed bank’s Asia retail and wealth management businesses to DBS would “simplif[y] our business, while allowing us to continue to benefit from higher levels of growth in the region, through a focus on our largest, most successful business in Asia – banking large corporate and institutional clients driven by trade and capital flows, particularly with Australia and New Zealand”.
“By focusing our resources in Asia – whether that is capital, technology or people – on institutional banking, we can continue to build a world-class, capital efficient business, by strengthening our network and the support we provide to our key institutional clients,” added Elliott, who took over as CEO in January.
Credit Suisse moving in
ANZ’s announcement of its planned sale of its Asian operations to a Singapore bank – the sixth largest private bank in the Asia-Pacific region, according to a 2015 ranking by Asian Private Banker – came on the same day that the Financial Times published a full-page article on how Switzerland’s Credit Suisse is “pushing ahead” in Asia, under CEO Tidjane Thiam, “in the hope of managing the fortunes of the region’s rich”.
“[Thiam’s] plan to aggressively expand Credit Suisse’s business in the region comes as many of the bank’s rivals are pulling back as Chinese growth slows,” the FT article, which is also online, notes.
“Goldman Sachs is cutting 15% of its investment bankers in Asia, excluding Australia and Japan, and ABN Amro is selling its Asian private bank.”