Australia & New Zealand Banking Group (ANZ) is preparing to acquire Royal Bank of Scotland Group’s retail and commercial-banking operations in Hong Kong, Taiwan, Singapore, Vietnam and Indonesia, reported Bloomberg.
As soaring bad loans at home are eroding profits, ANZ said last month that it would cut its dividend for the first time since the 1991 recession. Further, Michael Smith, CEO of ANZ, is increasing the bank’s business activities in Asia, to raise the proportion of income derived from the continent, to 20%.
On the other hand, RBS is trying to cut down its operations across 36 countries, after posting the biggest loss in UK corporate history in 2008. Stephen Hester, who replaced Fred Goodwin as CEO after the bank was bailed out by the UK government, is putting the bank’s Asian operations for sale after the prospective bidders had evinced interest in acquiring individual operations.
Compared to its Australian competitors, ANZ has more investments in Asia. ANZ sold $2 billion of shares this May to fund a bid for RBS’ Asian assets. It had reportedly paid $114 million to increase its holding in Indonesia-based PT Bank Panin, to leverage rising demand for banking in the country. ANZ is planning to begin six new offices in Vietnam. It already holds a 20% stake in Shanghai Rural Commercial Bank. It also has a holding in Saigon Securities and a stake in Malaysia’s AMMB Holdings.
