ANZ claims its transaction banking business in the region will “remain unchanged”, despite selling its Asia wealth management and retail banking units to DBS.
The bank has been backtracking on its erstwhile aggressive Asian strategy for the past couple of years. Singaporean bank DBS has agreed to buy the two businesses, which have combined deposits of US$17bn and loans of US$11bn.
This will leave institutional banking – which includes transaction banking – as its sole focus in Asia.
An ANZ spokesperson tells GTR: “The transaction with DBS only covered the retail and wealth businesses in Singapore, Hong Kong, China, Taiwan and Indonesia and does not affect the other parts of the institutional business, which includes transaction banking. Our footprint in Asia for our institutional, and transaction banking, customers will remain unchanged.”
They add that DBS wishes to hire the majority of ANZ staff in the sold-off units, but that the deal has no impact on personnel in the transaction banking division.
In March, ANZ exited the SME market in Hong Kong, Indonesia, Singapore, Taiwan and Vietnam with a loss of 100 jobs. This was viewed as part of CEO Shayne Elliott’s desire to turn away from high risk-low return business that had been courted by his predecessor Mike Smith in the nine years from 2007.
In November last year, Carole Berndt, who was then the newly-appointed head of global transaction banking at ANZ, told GTR that the bank would be looking to exit its Asian trade finance business.
She said: “We looked at our trade book and clients and the blend of those where we can’t continue to deliver the product with requisite return, we have chosen to exit and capital redeployed to clients in other areas.”
A source familiar with the situation recently said that staff at the bank felt confused and betrayed by the perceived invalidation of their work.
“We were under instructions to add as many assets as possible and then that was scrapped, seemingly without any prior notice,” said the source, speaking to GTR on condition of anonymity.
Berndt has since left ANZ, to be replaced by Mark Evans. Evans, on a recent video conversation with GTR from Sydney, reaffirmed the bank’s commitment to trade finance in Asia, but acknowledged that it would be focusing more on international clients in the region.
ANZ is announcing its annual results this week (November 3), so figures for its Asia trade business are unavailable.
While ANZ was the most gung ho of Australia’s big four banks on its approach to Asia, others have also been feeling the pinch and restructuring their operations in the region.
It was reported in October that Westpac would cut its headcount in Asia, in line with a large restructuring of its trade team that has been underway for months.
In response to a request for further information on the job cuts, a Westpac spokesperson said: “From time to time we do make business changes to simplify the structure and operating models. However, we do not comment on speculation.”