Big banks look to Asia, corporate customers hold back
The macro-economic drivers in Asia are "the friend" of banks and investors with an Asian focus, mused Andrew Géczy, ANZ's chief executive for international and institutional banking, in an article in his bank's Blue Notes publication. Meanwhile, over at HSBC Australia, James Hogan, its head of commercial banking, was warning that not enough of his clients were transacting and settling trades in RMB, thereby missing out on new and deeper relationships with their Chinese counterparts.But back to Géczy: "Trade in Asia is forecast to grow nearly twice as fast as the rest of world as the economic centre of gravity shifts irreversibly to Asia," he observed. "By 2020 six of the top ten trading nations will be Asian and most Asian trade growth will be driven by emerging Asia and intra-Asia trade."For ANZ and for our investors, I believe it is the trade and investment flows that matter more than any individual country's GDP as they provide major opportunities for our business. For example, Asia's banking pools will remain the fastest growing pools, outpacing the rest of world by two to one," Géczy wrote, before moving on to explain in some detail why he believed ANZ had set itself up for the inevitable boom in trade. Somebody had better tell his corporate customers, and those of the other Asia focused corporate bankers, to get a wriggle on then, if a recent survey by HSBC is any guide to Australian companies' attitudes to trade competition.Research by HSBC has found foreign companies that settle China trade in renminbi (RMB) see it as a source of competitive advantage and expect stronger trade growth. The pay-offs have been in the form of both financial and relationship benefits, said 75 per cent of those respondents that are already transacting with China in RMB. Only nine per cent of the Australian companies with active China trades surveyed said they transacted in RMB, against an overall average of 22 per cent from amongst the 1,300 companies surveyed by HSBC that were in the US, UK, Canada, France, Singapore, Germany, Taiwan and UAE, along with firms from Hong Kong and mainland China. In five years' time, less than one third of Australian companies trading with China expect to be transacting in RMB."This lack of awareness and receptiveness among Australian companies to adopt RMB as part of their broader China strategy is alarming," said Hogan."Australian businesses risk falling behind global rivals in trade competiveness by failing to recognise the potential business development opportunities linked to RMB."Corporate traders in some parts of the world are already doing more than 50 per cent of their transactions with China in RMB, reported HSBC.