ANZ Bank to sell Shanghai Rural stake for $1.32b

A man walks past a branch of the Australia and New Zealand Banking Group Ltd (ANZ) in Sydney October 29, 2013. REUTERS/David Gray/File Photo

Australia & New Zealand Banking Corp. sold its 20 percent stake in Shanghai Rural Commercial Bank for A$1.84 billion ($1.32 billion), Chief Executive Officer Shayne Elliott’s latest move to reduce the lender’s retail presence in Asia.

China Cosco Shipping Corp. and Shanghai Sino-Poland Enterprise Management Development Corp. will each buy a 10 percent stake in the Chinese bank, the Melbourne-based company said in a statement Tuesday. The stake was valued at A$2 billion in ANZ’s 2015 annual report.

“The sale reflects our strategy to simplify our business and improve capital efficiency,” ANZ Deputy CEO Graham Hodges said in the statement, adding it would allow the bank to focus resources on its Asian institutional business. The sale will increase ANZ’s tier one capital ratio by about 40 basis points, the bank said.

Since taking over in January 2016, Elliott has sought to wind back the bank’s lower-returning businesses in Asia, a legacy of predecessor Mike Smith’s expansion into the region. In October, he announced the sale of ANZ’s retail and wealth-management businesses in five Asian markets to Singapore’s DBS Group Holdings Ltd. and signaled more divestments were to come.

Also on the block are stakes in Bank of Tianjin Co., PT Bank Pan Indonesia and Malaysia’s AMMB Holdings Bhd.

ANZ shares rose 1.3 percent to A$30.81 at 10:23 a.m. in Sydney. The stock gained 8.9 percent last year.

Asian Expansion

Under Smith, ANZ had more than doubled the number of corporate clients and almost tripled the number of employees in Asia to 21,000. The bank had set a target to earn as much as 30 percent of profits from outside Australia and New Zealand by 2017.

However, the strategy struggled to deliver anticipated returns as near-zero interest rates pushed on margins and new banking regulations required capital deductions for minority shareholdings in other financial firms.

ANZ first invested in Shanghai Rural, which was formed out of a group of local credit co-operatives that was approved for a banking license, in 2006. The Chinese bank has more than 300 outlets and employs more than 5,000 staff, according to its website.

Also Read: ANZ sale of insurance unit attracts Japan’s Meiji Yasuda, HK’s AIA Group

ANZ mulls Australian asset sales after scaling back in Asia

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.