Growing International Services, Trade and Investment

Wayne Stevenson Group General Manager Strategy, ANZ

ANZ in Asia Pacific

• ANZ has a long-standing substantial presence in the region

• Our network puts us among the top 5 banks in Asia

• Our Super-Regional strategy is based around priority markets and an expanded presence:

• Top 4 bank in Indonesia

• Largest foreign bank franchise in the Greater Mekong

• Some of Australia’s largest investments in Greater China, Indonesia, Malaysia, Vietnam

• Leading bank in the Pacific

Several key changes are occurring

Pre Global Financial Crisis Post Global Financial Crisis

• High growth

• Unsustainable credit growth

• De-regulation

• Plentiful inexpensive capital

• Centre of economic gravity – Developed economies

• Multi speed growth

• Deleveraging, lower credit growth

• Re-regulation

• Capital and funding scarcer, more expensive

• Economic power shift – Developing economies

Australia’s economic and trade engagement with Asia – the opportunity

• Australia’s economic and strategic interests are tied to Asia Pacific

• It is in our interests to ensure we are part of the evolving economic architecture

• Asia’s economies are stronger and better placed to become even more important to Australia’s future

• Trade between Australia, New Zealand and Asia has doubled over the past five years to $300 billion and intra Asia trade is now over $4 trillion

• Australia is increasingly seen as a safe and attractive place to invest with over $60 billion in direct foreign investment

Australia’s economic and trade engagement with Asia – the opportunity (ctd)

• Our customers are increasingly focused on Asia – 50% of our domestic Corporate and Institutional clients depend on Asia for more than 25% of their business and over 80% have some connection with the region

• Urbanisation will increase demand for services and accelerate transformation from manufacturing to services led economies

• Business services exports from India and China have grown by 10% each year for the last decade

• Over $13 trillion will be spent on infrastructure across Asia over the next 10 years

Addressing Barriers in Financial Services

• While opportunities exist there are barriers which restrict expansion:

• Equity limits on investments in local banks

• Single presence policies

• Two Bank rule

• Transparency disciplines

• Limits on numbers of branches and ATMs

• Restrictions on entry of temporary staff

Conclusion

• For an advanced, predominantly services based economy such as Australia, delivering outcomes on services as part of Australia’s trade negotiations is crucial

• Potential to significantly expand and diversify Australia’s export base

• We need agreements which ensure foreign service providers are treated no less favourably than their local counterparts

• To make the most of this opportunity we need to

• Foster industries which are regionally relevant and competitive

• Be innovative and look for new ways of doing business and thinking about our relationship with Asia