IFR Asia - August 18, 2018

People

&Markets

ANZ banks on growth in Japan

Securities licence comes amid renewed focus on growth

AUSTRALIA & NEW ZEALAND BANKING GROUP is

targeting double-digit growth in Japan as it

looks to scale up its institutional business

following a retrenchment across the region

over the last two years.

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new Japanese securities business earlier this

month after registering its licence with the

Japan Securities Dealers Association.

The Australian lender was granted a

securities licence from Japan’s Financial

Services Agency in May, but was required to

complete the registration before going live

with the new business.

Farhan Faruqui, group executive for

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growing the bank’s Japanese footprint.

“We’ve had a presence in Japan for almost

50 years, but I think there’s no question that

we now have an even more competitive

offering,” he said.

“We expect double-digit increases in

revenues, starting from next year, although

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Certainly, we have very healthy growth

expectations over the next two to three

years.”

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Four lenders to receive a securities licence in

Japan, although Macquarie Capital already

holds the same licence.

ANZ will offer a mixture of products to

Japanese investors, including Australian

dollar-denominated and New Zealand dollar-

denominated bonds as well as structured

notes, repurchase agreements and other

securities products.

Faruqui said that the decision to expand

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among investors for assets denominated in

Australian and New Zealand dollars due to

the higher yields and low credit risk on offer

in the two currencies.

“Japan has had a very prolonged period

of low interest rates,” he said. “If you look

at high-net-worth and retail investors in

particular, they’re hungry for yield and

Aussie dollar and Kiwi dollar-denominated

bonds have been their top choice for a

while.”

Faruqui said that the bank was looking to

add staff, although he declined to specify the

number of new hires.

“We will have to expand our headcount

as we build out this business and that will

happen across multiple areas.” he said. “We

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We will certainly want to bring in a syndicate

desk.”

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overnight. It’s a case of consistently building

out the business over a period of time.”

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point for the bank. Its chief executive Shayne

Elliott has devoted much of his two and a

half years in the job exiting a number of the

bank’s businesses in Asia, in contrast to the

“super regional” strategy championed by his

predecessor, Mike Smith.

ANZ has so far disposed of retail and

wealth management businesses across six

markets.

In December, it sold its 20% stake in

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Faruqui is adamant that this does not

represent a retreat from Asia. He said that

the bank had shifted its focus in the region

towards institutional clients.

“When we sat down two and a half

years ago, we asked ourselves some tough

questions about how to build a business that

is sustainable in Asia, and hence we have

placed our focus on the institutional business

and decided to exit businesses where we did

not think we had a winning proposition,” he

said.

“We are seeing real success and that is

because of the investment we have been

making. We have built a dominant position

in the region in the loans and DCM space. We

have invested in cash management to build

a strong platform in the region. Our markets

business has become extremely successful.

We’ve built a strong platform for Asian

currencies, for example.”

ANZ’s institutional business did not

completely escape the retrenchment.

The bank has steadily been reducing risk-

weighted assets in Asia since Mark Whelan

took charge as group executive two and a half

years ago, although he said its focus was now

shifting towards growing the business.

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gone up considerably but obviously revenues

have gone down,” he said. “What we are

doing now is reshaping the business to grow

revenues with the right customers and the

right returns.”

THOMAS BLOTT

TOP STORY BANK STRATEGY

Who’s moving where...

„ CITIGROUP is

relocating a senior

New York-based

banker to Hong Kong

to take up the newly

created position of

head of banking and

origination for Belt

and Road.

Beibei Li is due to

take up the role on

September 1 and will

report to Gerry Keefe,

Citigroup’s head of

corporate banking for

Asia Pacific.

Li joined Citigroup

in 1999, starting

as a management

associate for

corporate and

investment banking

in the Shanghai

office.

She relocated to

New York in 2006

and most recently

has been responsible

for the Chinese

institutional client

portfolio in North

America within the

global subsidiaries

group.

Li’s appointment

comes only a few

months after HSBC

appointed Mukhtar

Hussain to a similar

position as head of

the Belt and Road

initiative for APAC.

„ NOMURA has

hired Jin-goo Kim as

head of debt capital

markets for Korea.

Kim, who was most

recently an executive

director with BNP

Paribas, is due to

start his new role in

September. He will be

based in Seoul.