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NEWS UPDATES 9 August 2009

ANZ Bank bullsih in Indonesia after acquisition of RBS

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Australia and New Zealand Bank (ANZ)expects the bulk of its business here to come from institutional, retail and wealth banking, following its acquisition of Royal Bank of Scotland's (RBS) local assets, reported the Jakarta Post.

ANZ CEO for Asia Pacific, Europe and America, Alex Thursby, said Friday that after the acquisition, the bank's biggest overseas purchase to date, ANZ was forecasting institutional and retail banking would contribute most of its income in Indonesia, once it has received approval to begin operating.

"As a foreign bank, we'll be focusing mainly on institutional, retail and wealth banking," Thursby said.

"I don't think we'll compete in the mass market. That's the domain of local banks. Frankly, they're better in that sector."

On Tuesday, ANZ announced it had signed a $550 million deal to acquire RBS's retail, wealth management and commercial businesses in Indonesia, Taiwan, Singapore, Hong Kong, the Philippines and Vietnam.

Thursby said ANZ was now just waiting for the central bank's approval of the acquisition. "We expect to get the approval in nine months at the most, hopefully six," he said.

Thursby added ANZ already had a strong base in Indonesia, with corporate clients from mostly the mining and energy sectors. "Our corporate clients include the top eight companies operating in the mining and energy sector," he said.

The retail and wealth banking niche, he went on, represented about 4 percent of Indonesians, who were increasingly in need of private banking services. "The exciting thing about the wealth business is that RBS plays in the same market segment as us, so we really consolidated," he said.

With the acquisition, ANZ will have 29 branches in nine cities across Java, Sumatra, Kalimantan and Sulawesi, 20 of them from RBS. "We'll also get an additional 350,000 credit card holders to our existing 500,000," Thursby said.

"With that, we now have a strong customer base. So our new investments in the near future will be to improve our products rather than open new branches." RBS's Asian portfolio includes 54 branches, $3.2 billion in loans and $7.1 billion in deposits, from approximately 2 million clients. Thursby said ANZ was also targeting commercial banking.

"Clearly the commercial banking segment is another that we'll grow, a little bit slower initially," he said. "We don't have commercial businesses at the moment, while RBS does. So it'll be very good for us."

He added his bank was seeking to be the No. 1 foreign bank in Indonesia and the leading regional bank in the Asia-Pacific region.

"We're incredibly optimistic about Indonesia and other countries in the region," he said.

Citi Indonesia remains the largest foreign bank here by assets, with 20 branches across the archipelago, 65 Citifinancial centers and 105 ATMs. It also has an extensive corporate distribution network of 4,800 locations, through its partnership with various institutions, including five local banks in all provinces. The other top foreign banks here are HSBC and Standard Chartered Bank.

Thursby said links between Australia and Asia were growing stronger, both economically and socially. “his is indicated by growing trade and investment between the two," he said. "Also, 46 percent of our graduates in Australia are Asian, whose first languages are Asian ones."



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