Institutional lending driving Asian growth for ANZ

ANZ has set itself a goal of becoming "a four institutional bank in Asia", bank management disclosed in an investor presentation yesterday.

The bank is conducting a series of presentations to fund managers and analysts on a tour of select banking centres of north-east Asia. The bank is posting the presentation materials each day.

Alex Thursby, Group Managing Director Asia Pacific Europe and America for ANZ, named three customer segments it would pursue: "multinational/regional corporate"; "emerging corporate"; and the better defined "financial institution and public sector".

A pie chart in the presentation shows that half of ANZ's profit from Asia (and the Americas, and the small Pacific business) came from institutional banking. Most of the rest came from partnerships and the balance came from retail banking and wealth management.

Profit from the latter portion may grow, since the second chief theme to ANZ's strategy in Asia is to target the "affluent sector" through its wholly-owned banking businesses in select markets.

ANZ also has a series of minority investments, or "partnerships", of which five (in China, Indonesia, Malaysia and the Philippines) are most important to the bank.

A second presentation, by Wayne Stevenson, chief financial officer for the Asian business, showed that ANZ held a "funding surplus" of around US$20 billion from its Asian operations as of March 2010, and taking into account a loan to deposit ratio of 47 per cent.

ANZ has been able to recycle around US$7 billion of this surplus into its operations in Australia, according to notes on the presentation prepared by Goldman Sachs JB Were.

Three more strategic themes highlighted in Thursby's presentation for the years "beyond 2012" were to "deepen organic growth in hubs and franchises", "commence [the] build out of [the] franchise in second wave markets" and "seek inorganic opportunities to build scale".

There's an assumption that the latter goal is a current goal, with the bank a presumed bidder for controlling stakes in Korea Exchange Bank and Panin Bank in Indonesia.