October 31, 2016 / 9:51 AM / 2 years ago

ANZ to grow Asia institutional banking after retreat in wealth, retail

HONG KONG (Reuters) - Australia and New Zealand Banking Group (ANZ) (ANZ.AX) plans to return to growth in its institutional business in Asia after the sale of its wealth and retail businesses in five regional markets, senior executives of the bank said on Monday.

Pedestrians are reflected on a window of ANZ Bank located in central Sydney, Australia, October 5, 2016. REUTERS/Steven Saphore

ANZ announced the sale earlier in the day of its wealth and retail businesses in Singapore, Hong Kong, China, Taiwan and Indonesia, to DBS Group (DBSM.SI) for around S$110 million ($80 million).

The institutional business for ANZ involves services such as trade financing, foreign exchange and cash management, mostly for corporate clients.

“It’s very different from the retail business, we have already got scale. So we just want to do more of that,” said Shayne Elliott, chief executive of Australia’s third-largest bank by market value.

“We want to be the best bank in the world for people who move goods and money around this region,” Elliott told Reuters in an interview in Hong Kong. “So we are just getting ourselves in shape.”

The Australian lender has been shrinking the institutional business over the last 18 months by reducing risk-weighted assets and the number of clients that don’t bring in a lot of revenue, said Mark Whelan, group executive for institutional at ANZ.

“And we have still got some more to go, but what’s hidden within that number is that we are growing with those customers who fit our criteria going forward,” he said. “We have got another 12 months to sort through that in my view.”

After exiting the Asia wealth business, ANZ will announce the outcome of the review of its Australian wealth management business on Thursday, along with its earnings, Elliott said, declining to give details.

Reuters reported in May, ANZ was exploring the sale of part or all of its life insurance and product development unit, which is part of the Australian wealth business..

Elliott said the life business in Australia consumes about A$4-$5 billion ($3 billion-$3.8 billion) of capital, making it very capital intensive business to sustain.

“The review for wealth business in Australia is very different and for different reasons. The wealth business in Australia is not small, it’s really a question of what’s the right way forward,” he added.

Reporting by Sumeet Chatterjee and Denny Thomas; Editing by Muralikumar Anantharaman

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