ANZ On The Prowl For Acquisition Opportunities

Post by Sharat on November 2, 2009 · Under Australian Economy, Business News, Capital Markets, Company News, International Business News, Mergers & Acquistions, banking, news · Comment

Mike Smith, chief executive of Australian banking major ANZ, says he hopes the lender will be “substantially bigger” within two years, and says he believes that Australian financial institutions could play a much larger role in the global economy going forward.

“Internationally they could play quite a big role and I guess that depends on the individual appetite of each bank to move internationally. Certainly within our own case I hope to be substantially bigger in a couple of years’ time.” Mr. Smith told Sky Business.

ANZ is already the largest Australian lender in Asia, and of the Big Four, possesses the largest acquisition war chest.

Speaking to ABC, Mr. Smith said he worried that the bank strong capital position would weaken its return on equity, though he did add that having a strong capital position was preferable to having one which could be perceived as being weak.

“But I’d rather be too strong than too weak right now,” he said. “I think that the situation is still uncertain and it provides us with huge opportunity both for organic growth but also for any acquisition that may come along opportunistically.”

Mr. Smith said that whilst he was considering whether to return some of the capital ANZ was sitting on to its shareholders, he was also on the lookout further acquisition opportunities in Asia that could be used to deploy some of the excess capital.

“I think we need to build up our institutional business a little bit more (in Asia), gradually get into the middle market … and then build our wealth and the high-end retail,” he told the ABC.

Mr. Smith’s ambition is to turn ANZ into a super-regional lender that delivers 20 per cent of its earnings internationally within two years. He believes that the US and European financial systems are still at risk of further shocks, which may produce additional acquisition opportunities for ANZ, as distressed lenders divest assets and focus on their core businesses instead.

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