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Australia’s fourth largest bank, Australia and New Zealand Banking Group Limited (ASX: ANZ), has solidified its ground in China by announcing it will invest an additional $300 million Australian dollars to business growth in Asia’s fastest growing economy.
“Our business in China has grown steadily since we established a presence in 1986 and the additional capital we plan to invest in ANZ China will support further expansion, growth in customer lending, employee recruitment and product development to better service our customers. ANZ aims to become a super regional bank in the Asia Pacific region, and China is a strategically important market for us. We are making good progress towards our goal of earning 25% to 30% of group profit from Australia and New Zealand by 2017,” said ANZ Chief Executive Officer Mike Smith.
This is the first increase in capital by ANZ in China after the bank initially invested $395 million. ANZ is the first Australian bank receiving license to provide Yuan-denominated services to Chinese citizens, paving the way for ANZ to expand operations in the local market.
ANZ also ranks first compared to Big 4 in Australia, meaning they hold many of the market shares in the country. The bank now desires to place exclusive focus on a niche in China, more than its domestic competitors like Westpac, Commonwealth and National Australia Bank.
According to the strategy outlined by ANZ bank in 2007, the bank’s primary objectives in the first 1-2 years are to drive Asia profit, capture existing opportunities, and manage strategic cost. Furthermore, the bank wants to increase quality to compete with global leaders and find a platform for growth by mergers and acquisition. In the following three years, ANZ will perfect customer experience and in-fill mergers and acquisitions in Asia.
Under targets set by the bank, within a span of five years or more ANZ intends to build a leading super regional bank in the Asia-Pacific region. They want to increase their network by 10 more outlets in the next decade, in addition to the six outlets they already control in the cities of Beijing, Shanghai, Chongqing and Guangzhou.
ANZ isn’t the only bank investing in China. DBS, Southeast Asia’s Largest bank, said last month that it would inject 2.3 billion Yuan into its Chinese unit. In February, HSBC, based in London, also said it would like to increase its Chinese Branch network almost eightfold over the median term.