Australia's big banks are finally figuring out how to make money in Asia
Over the last six months, ANZ, CBA and NAB have all pulled back in various ways from Asia. But in the case of ANZ - and Macquarie - it’s less a story of retreat from the region than of expansion.
ANZ’s decision to sell down its stake in Malaysian lender AmBank last week was generally viewed as an opportunistic but sensible move in line with the company's broader strategy. ANZ described it as part of its ongoing “simplifying” of the group and term sheets showed a stake was being shopped around before the sale.
The reflexive view was this was another step in ANZ’s retreat from Asia. Yet the reality is ANZ’s earnings from Asia have never been higher – they just come from institutional banking of multinational corporations, sovereign funds and other banks rather than via branch networks and consumers.
It’s difficult to keep track of the number of Asian strategies ANZ has had over the last 30 years. But that’s true more broadly about the engagement of the whole Australian banking sector in what is both the fastest growing and closest group of national economies.
Westpac, Commonwealth Bank and National Australia Bank have all, over those decades, darted in and out of Asia as fashion, opportunity, risks and costs changed. Westpac, in its “Bank of the Western Pacific” guise, was once listed in Japan. But even over the last 12 months, Commonwealth Bank has sold out of Indonesia having previously departed China and NAB has closed its Hong Kong operations.
