ANZ's wholly-owned banking business in Asia produced an improved profit for the group in the March 2011 half, though this accounts for less than one third of the profit that bank management likes to attribute to an international business that covers customers on three continents. Amid all the rhetoric emanating from ANZ over its "super regional" strategy in Asia the actual profits are easy to misunderstand, in part because when ANZ chiefs talk about Asia they usually also mean to include the European and American activities of the bank. So, when ANZ cites a profit for Asia of US$396 million, the bank's management is really referring to the profit for the "Asia Pacific, Europe and America region". As the table published with this article shows, the profits for the Asian network of ANZ - that is, banks ANZ owns or controls - were US$118 million. Six months prior, the profit was only US$15 million, which follows ANZ's preferred presentation on a "pro-forma" basis. ANZ-owned banks in Asia include banks in Taiwan (bought from RBS), Indonesia (where ANZ has traded since the 1990s), Singapore, Hong Kong, the Philippines, Vietnam and Cambodia. ANZ has larger investments in associates, characterised by minority stakes of around 20 per cent, the best known cases are in China and Malaysia. ANZ refers to these as "partnerships". The bank recognises a share of the profits of these businesses in which its management role is limited. A$148 million of this $397 million, or 38 per cent of first-half Asian profit, arises from these partnerships. This is down from 50 per cent six months earlier. One drag on Asian network profits is the investment needed to introduce ANZ systems to replace those of RBS in the six countries where ANZ had made takeovers in the last year or so. This is consuming A$40 million each half year. ANZ management also often makes the point that the revenues and profits from Europe and America (US$56 million in the latest half) only arise from the core franchise the bank is developing in Asia. On a different theme, one topic from yesterday's investor presentation was the use of "surplus" deposits from Asia. Management told sceptical analysts that it had put the brakes on raising commercial deposits in Asia since they were not needed and would only be invested, in some cases, in low-yielding liquid (often central bank) securities. Shayne Elliott, CEO of ANZ's institutional bank told the briefing, "The way we've always looked at this is the Asian deposits will be able to grow sufficiently to fund all of our Asian growth and that will still be our expectation. "To the extent there's a surplus there's an opportunity to be able to repatriate some of that back into Australia and New Zealand which is what we've done. I think it's best to look at it this way, in terms of being able to fund the growth.