MELBOURNE (REUTERS, BLOOMBERG) - Australia and New Zealand Banking Group flagged on Tuesday (March 22) a further restructuring of its Asian business as Australia's No 4 lender seeks to shift focus to areas where it can better exploit its potential.
New CEO Shayne Elliott told a business conference in Melbourne that the lender needs to "tighten" its Asia business that it has developed over the years, as a result of which the business might end up being smaller.
ANZ, which has the most focus on Asia among Australia's major lenders, is reviewing its business in the region in the face of an economic slowdown there and has exited what it dubs its "emerging corporate" business in Singapore, Vietnam, Hong Kong, Indonesia and Taiwan.
"For Asia...we're at that point in maturity where we've built this great thing and now it's just time for us to tighten it up, said Mr Elliott. "It may result that at the end of the tightening up, Asia is a bit smaller than it is today but that's not the objective."
"What you build has to be of value for your customers. That means they have to be prepared to pay for it and want to use it. Otherwise, what's the point?"
Separately, an ANZ spokesman said the bank plans to cut 12 jobs in its markets division to reduce costs.
The reductions will be spread across Australia, New Zealand, Asia and the UK, spokesman Stephen Ries said on Tuesday in an e-mail.
ANZ's global markets unit, which includes foreign-exchange, syndicated loans, fixed-income and commodities trading, has 1,400 staff in cities from New York to Tokyo, according to the bank's website.
Australia's four largest lenders - ANZ, Commonwealth Bank, National Australia Bank Ltd. and Westpac Banking Corp. - and Macquarie Group Ltd. cut a combined 1,475 jobs in their respective half yearly periods in 2015, ending two consecutive years of increased payrolls.
ANZ said March 11 it was eliminating 100 jobs as it exited small business lending in parts of Asia while larger competitor Commonwealth Bank of Australia late last year shut its institutional equities team and axed 20 positions in its global markets team.
Other mid-sized lenders such as ING, RBS and Societe Generale have scaled back operations in Asia after failing to reach critical mass.
Since taking the helm this year, Mr Elliott has rejigged key leadership teams and has said ANZ would shift focus to areas where growth is faster and returns are attractive.
Mr Elliott's predecessor Mike Smith kick-started the bank's "super-regional" strategy in 2007, but investors have not embraced that strategy due to concerns Asia is distracting from the more profitable Australian home-lending business.
ANZ's plans to sell its 39 per cent stake in Indonesia's Bank Panin is "not so active" at the moment, Mr Elliott said on Tuesday, confirming a Reuters report that the sale has hit a roadblock after the death of a key member of the family that owns the biggest stake in the Indonesian lender.
Partnerships with other banks "are no longer as strategically important as they used to be," Elliott added.
It was not clear when ANZ, which needs to free up capital to boost its finances, would be able to revive the sale process. ANZ's stake is worth an estimated US$450 million.