17 May 2012

ANZ invests to support growth in China subsidiary

7:24 am on 17 May 2012

ANZ says it will invest $A300 million more to support growth in its China subsidiary as it seeks to boost its presence in Asia.

The additional investment is the first since an initial $395 million put into the subsidiary in 2010.

ANZ chief executive Mike Smith says the bank is on the verge of getting the green light to provide retail banking services in China, adding it also aims to offer wealth management services.

Deposit-taking is lucrative in China, which has about 85 trillion yuan ($13.5 trillion) worth of deposits, especially since banks' net interest margins are to a large extent protected by strict government regulation.

However China's tight control over its financial sector means local banks dominate the industry. Accounting firm KPMG says foreign banks account for just 2% of total banking assets in 2010.

ANZ's latest investment comes as it tries to model itself after HSBC by turning into an Asian lender.

It is seeking to earn 25 - 30% of its profit from Asia by 2017.