ANZ pulls the plug in core Asian markets

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anz-singaporeRetail banking customers of Australia and New Zealand Banking Group (ANZ) in Singapore, Hong Kong, China, Taiwan and Indonesia will soon have to look for a new haven for their money or get a new DBS-branded bank book as the Australian lender shrinks its Asia business.

ANZ will sell its retail banking and wealth management businesses in those five Asian markets to DBS Group, Singapore’s largest bank, a move seen as the first significant retreat from Asia for ANZ. The businesses will be sold for around $80 million. In addition, ANZ also looks to exit its retail banking and wealth management business in the Philippines and Vietnam, but there were so far no plans to sell similar assets in Cambodia and Laos.

The retreat of such a large bank from Asian markets follows a similar move by HSBC when it withdraw in 2012 from consumer banking in Thailand, South Korea and Japan.

Both cases underscore how players in private banking are being squeezed out due to lack of scale in Asia. ANZ said it would have needed to invest further in branches and digital capacity to build up those businesses, while DBS noted it already had the advantage of existing infrastructure in those markets and would not have to deploy much capital.

“Further investments do not make sense for us given our competitive position and the returns available to ANZ,” said ANZ CEO Shayne Elliott, adding that the bank was not turning its back on Asia entirely but would focus on its institutional banking business.

For DBS, which recently became the fifth biggest player in private banking in Asia-Pacific, the deal is part of aggressive attempts by Singapore banks to pick up assets as some Western wealth managers depart from the region unable to compete with dominant players like UBS and Credit Suisse.

Sources said DBS is also weighing a bid for ABN AMRO’s Asian private bank, a deal estimated to be worth at least $300 million. Earlier this year, it lost out to domestic rival Oversea-Chinese Banking Corp in bidding for Barclays wealth units in Singapore and Hong Kong.

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Retail banking customers of Australia and New Zealand Banking Group (ANZ) in Singapore, Hong Kong, China, Taiwan and Indonesia will soon have to look for a new haven for their money or get a new DBS-branded bank book as the Australian lender shrinks its Asia business. ANZ will sell its retail banking and wealth management businesses in those five Asian markets to DBS Group, Singapore's largest bank, a move seen as the first significant retreat from Asia for ANZ. The businesses will be sold for around $80 million. In addition, ANZ also looks to exit its retail banking and wealth...

Reading Time: 2 minutes

anz-singaporeRetail banking customers of Australia and New Zealand Banking Group (ANZ) in Singapore, Hong Kong, China, Taiwan and Indonesia will soon have to look for a new haven for their money or get a new DBS-branded bank book as the Australian lender shrinks its Asia business.

ANZ will sell its retail banking and wealth management businesses in those five Asian markets to DBS Group, Singapore’s largest bank, a move seen as the first significant retreat from Asia for ANZ. The businesses will be sold for around $80 million. In addition, ANZ also looks to exit its retail banking and wealth management business in the Philippines and Vietnam, but there were so far no plans to sell similar assets in Cambodia and Laos.

The retreat of such a large bank from Asian markets follows a similar move by HSBC when it withdraw in 2012 from consumer banking in Thailand, South Korea and Japan.

Both cases underscore how players in private banking are being squeezed out due to lack of scale in Asia. ANZ said it would have needed to invest further in branches and digital capacity to build up those businesses, while DBS noted it already had the advantage of existing infrastructure in those markets and would not have to deploy much capital.

“Further investments do not make sense for us given our competitive position and the returns available to ANZ,” said ANZ CEO Shayne Elliott, adding that the bank was not turning its back on Asia entirely but would focus on its institutional banking business.

For DBS, which recently became the fifth biggest player in private banking in Asia-Pacific, the deal is part of aggressive attempts by Singapore banks to pick up assets as some Western wealth managers depart from the region unable to compete with dominant players like UBS and Credit Suisse.

Sources said DBS is also weighing a bid for ABN AMRO’s Asian private bank, a deal estimated to be worth at least $300 million. Earlier this year, it lost out to domestic rival Oversea-Chinese Banking Corp in bidding for Barclays wealth units in Singapore and Hong Kong.

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