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ANZ Announces Acquisition Of RBS Assets In Six Asian Countries
Australian banking major and the fourth largest Australian lender, Australia & New Zealand Banking Group Ltd (ANZ) has agreed to acquire the banking assets of Royal Bank of Scotland (RBS) in six Asian countries, as part of executing its strategy to become a super regional bank and counter slowing growth in its domestic market.
Melbourne based ANZ will acquire RBS businesses in Taiwan, Indonesia, Singapore, Hong Kong, Vietnam and The Philippines from RBS for $550 million, the lender said on Tuesday in a statement to the Australian Stock Exchange.
RBS is divesting or closing operations in two-thirds of the 54 countries it has operations in, a strategy it decided upon after posting the largest ever loss in British corporate history last year. The acquisitions are step further towards ANZ chief executive’s Mike Smith stated ambition of converting the lender into a super regional bank, doubling its income earned from the Asia to 20 per cent of total group income.
“The acquisition of these RBS businesses is a further stepping stone in our super regional strategy,” Smith, 52, said in the statement.
ANZ’s half year profit for the six months ending March 31st 2009 fell 28 per cent from the previous year and stood at $1.42 billion, as provisions for bad debt or credit impairment charges doubled to $1.44 billion.
In its statement, ANZ said that it will pay 1.1 times the recapitalized book value of the RBS businesses.
The mix of businesses constitute 54 branches in six countries with US$ 3.2 billion in outstanding loans, US$7.1 billion in deposits and approximately 2 million customers ANZ said. Amongst the Big Four lenders in Australia, ANZ has the most investments in Asia, with stakes in Malaysia’s AMMB Holdings Bhs, Saigon Securities Inc, Shanghai Rural Commercial Bank, Vietnam’s Sacombank and a 38 per cent stake in Indonesian lender PT Panin Bank as well as a 40 per cent holding in a credit card joint venture in the Philippines with Metropolitan Bank & Trust Co.
ANZ which this year has raised $4.7 billion in equity capital from investors, said that its closely watched tier-1 capital ratio will stand at 9.5 per cent after completing the acquisition. The lender currently has an Aa1 credit rating from Moody’s Investors Service, the second- highest investment grade, and an AA rating from Standard & Poor’s.
In China, ANZ owns large stakes in two Chinese lenders, holding a 19.9 per cent stake in Shanghai Rural Commercial Bank and a 20 per cent stake in Tianjin City Commercial Bank. Back in March ANZ said it intends to open as many as 20 new branches in China by 2012 and has applied for regulatory approval to open a wholly owned local subsidiary in the worlds third largest economy.
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