ANZ Royal not for sale, says CEO
email exchange yesterday that he misspoke “in the heat of the moment”, and that not all Asian operations would be put up for sale.
“The strategic review that we announced is continuing with Vietnam and the Philippines,” he said.
“Cambodia in particular is actually a joint venture, so that’s not part of any ongoing [review] – and same with Laos.”
By afternoon, Reuters had updated its report to indicate that the two countries were not part of ANZ’s current divestment strategy.
However, Stephen Higgins, managing partner of the local investment firm Mekong Strategic Partners and a former CEO of ANZ Royal, said ANZ has long been reviewing its operations throughout Asia, and that exiting some or all of its business in Cambodia was clearly “on the cards”.
He said international banks operating in Asia generally face higher degrees of difficulty and competition compared to a decade ago, and as a result have seen their market share and profit margins diminish.
“The world for ANZ has changed since they really started increasing their investment in Asia over a decade ago,” he said.
“It’s more difficult in a regulatory sense, it’s more competitive, and in general local banks tend to win over crossborder banks.”
He said in recent years, ANZ Royal Bank has gone from being a market leader to around the seventh most-profitable bank in the Kingdom.
“While ANZ Royal still has some great people working here including its new CEO, ANZ Group has imposed a much narrower focus on it in recent years,” he said. “So it’s really been competing with one arm tied behind its back.”
According to its 2015 annual report, ANZ Royal Bank held over $1 billion in assets and earned a net profit of $15.5 million last year, down from $17.8 million a year earlier.
Yesterday’s media reports were not the first time for ANZ’s joint venture with Kith Meng’s Royal Group to appear on unsure footing. In 2014, it was reported that ANZ’s then-CEO Mike Smith was looking to break up the marriage after Royal Group engaged in a series of botched investment schemes into airlines, and two internal audits that revealed that ANZ Royal Bank had financed a local, politically connected sugar company that was under investigation for alleged child labour abuses.
However, Royal Group chief financial officer Mark Hanna yesterday said that he was unaware of any discussions about breaking up the joint venture, or any plans by ANZ to sell its 55 percent stake.
“This news of ANZ moving away from Asia is a total surprise to us,” he said.
“And I can’t comment on it as there have been no formal discussions with ANZ or even them approaching us to discuss a sale.”
A banking analyst, speaking on condition of anonymity, said he was unaware of any discussions between ANZ and Royal Group over an exit plan.
However, the source added that “the writing was on the wall”, given the bank’s overall retreat from Asia.