BEHIND THE NUMBERS: An international advantage

Facilitating this type of trade and investment has always been in ANZ’s DNA – right from the early 1800s when our predecessor banks began financing the movement of goods between Great Britain and Australia.    

"Return on equity from the International business is now triple what it was in 2016. And Institutional contributed about 43 per cent of ANZ Group's overall profit.”

And so it remains today for ANZ’s Institutional division. We are still helping businesses move goods and capital around the world.

We operate in 29 markets, with a strong presence across Asia Pacific. Our people understand the intricacies of navigating complex global markets and we use our network to tailor solutions for our customers. Having feet on the ground across our international business gives us real-time intelligence on the capital flows which drive the global economy.

It also provides us with crucial diversification outside our home markets of Australia and New Zealand. This international footprint is a point of difference among our domestic peers. ANZ is the most international of the Australian and New Zealand banks with offices in all international financial hubs.

We’ve been in New York for 56 years, Japan 55 years, Indonesia 50 years, Vietnam 30 years and later this year we’ll mark 50 years in Singapore.

As we report half year results today, the contribution of the Institutional business is clear. Return on equity from the International business – which forms part of the Institutional division – is now triple what it was in 2016. And Institutional contributed about 43 per cent of ANZ Group's overall profit.

Point of difference

Our international network is a key differentiator for ANZ but it hasn’t always been that way. In fact, in the past our international network generated low returns. It was risky. We had to accept there was such a thing as being over diversified – doing too many things with too many people and in too many places.

So we made changes. Our International business today is very different to a decade ago.

We focused on collaborating with customers who value partnering with us, sharpened our geographic focus, invested in global systems and simplified our products.

Our International strategy follows our customers – we go where they need us. We have 6,500 Institutional customers globally and we build our capability to follow them.

ANZ is now the only Australian and New Zealand bank offering an end-to-end capability and on-the-ground expertise in our home markets of Australia and New Zealand and throughout Asia-Pacific, the US and the European Union. We help domestic businesses go offshore as well as bring investment into our home markets.

Our skilled people have a sound understanding of the local customers, the market nuances and the regulatory environment. This, teamed with ANZ culture, processes and connection with our Australia and New Zealand business has proven to be our competitive advantage.

Through a targeted approach, hard work and discipline, the profitability of the International business has significantly improved. We’ve aligned our business for long-term sustainability.

The opportunities

We continue to invest in our markets globally and we are seeing new avenues for growth – including in China where there is enormous demand for our services and our business there is growing. 

India offers significant opportunity too. Revenue has doubled in the past two years and is aiming to double again in the next few years. ANZ is one of the largest Australian companies operating there with about 80 bankers and 9,000 Group Capability Centre (GCC) employees – accounting for 20 per cent of our total global workforce. The GCC will allow Institutional to reshape its business and make it more efficient.

The demographics of the ASEAN countries are also promising as more large corporates shift their supply chains into the region and invest in green energy opportunities. By 2040, South-East Asia is expected to be an economic powerhouse fuelled by demographics, industrialisation, urbanisation and technology. Indonesia is on track to be the fourth-largest economy after the US, China and India.

Equally, our deep expertise in US and European markets has been a key area for growing our relationships with financial institutions, technology companies and strengthening capabilities in sustainable finance.

The broader Institutional business has also invested in developing services which help our global customers conduct business – including our payments and cash management business which continues to grow at pace.

I am positive about the sustainable growth and value International can deliver to ANZ Group and to the long-term value of its shareholders. We stand ready to help customers raise capital, move funds and manage risks across the International business.

Simon Ireland is Managing Director at ANZ International