Monday, July 7, 2008

ANZ thinks big in Vietnam

ANZ has stepped up its expansion into Asia with plans to incorporate a new wholly owned bank in Vietnam and open at least four branches by the end of the year. The nation's fourth-biggest bank has had a 15-year presence in Vietnam. It has branches in Hanoi in the north and Ho Chi Minh City in the south, plus a representative office in Can Tho Province. It also has a 13.9 per cent stake in Vietnam's leading investment bank, Saigon Securities, and a 10percent interest in Sacombank, the country's leading joint stock bank. The latest move follows relaxation of foreign investment rules after Vietnam's acceptance last year into the World Trade Organisation.

ANZ's group managing director Asia Pacific, Alex Thursby, said expansion in Vietnam was one of the bank's highest priorities in Asia. "The newly incorporated bank will extend ANZ's distribution to meet the needs of Vietnam's growing affluent population who are looking for more convenient access to bank branches, as well as products such as mortgage loans, credit cards, car loans and better savings and investments," Mr Thursby said.

In an investor tour last month, ANZ fleshed out chief executive Mike Smith's plans to become a super-regional bank, where profits from the region would grow from their current level of 7 per cent of group earnings to 20 per cent by 2012. A slide presentation said the growth projections implied a jump in Asia-Pacific net profit from $182 million in the first half of the current financial year to $1.5 billion. The number of branches throughout the region would treble from 99 to about 300, while the ATM network would expand from 155 to about 1000.

Vietnam, with 85 million people, is well-developed with a bankable population concentrated in Hanoi and Ho Chi Minh City. There is an emerging affluent class of about 820,000 people. ANZ said in a statement yesterday it would retain its existing foreign bank branch in Hanoi to support its development of Vietnam's institutional market, including debt capital markets and project and structured finance opportunities. The new ANZ retail outlets would be established over the next four years, starting in Hanoi and Ho Chi Minh City but spreading into other cities.

ANZ is among the first wave of foreign banks to be granted in-principle approval to incorporate locally in Vietnam. The bank opened for business in Vietnam in 1993, introducing the country's first ATM and its first project finance deal. The proposed new bank remains subject to approval by various regulatory authorities. Foreign Minister Stephen Smith, who is currently in Vietnam, welcomed the ANZ initiative. "ANZ's proposed growth strategy in Vietnam represents a welcome expansion of the bilateral investment relationship and also sends a clear signal to investors that Vietnam is open for business," he said.

Richard Gluyas, The Australian, 3 July 2008

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