ANZ looking to divest of stake in Chinese bank
(4 April 2016 – Australia) Following the sale of part of its stake in China's Bank of Tianjin last week, ANZ Bank is looking towards its next China deal, Fairfax Media has indicated.
The publication is reporting that Goldman Sachs has won the tender to find an exit route for ANZ Bank which wants to reduce its 20 per cent holding in Shanghai Rural Commercial Bank, which is valued at A$1.98 billion, according to ANZ's latest annual report.
The bank’s holding in Asia-based firms have become a drain on regulatory capital. The industry’s banking regulator, APRA, requires ANZ to fully deduct the equity in all its Asian joint ventures from capital; the rules were more generous to ANZ when the stakes were acquired nine years ago.
According to the reports, Goldman Sachs has been working with ANZ Bank's deputy chief executive Graham Hodges over the last month. The move follows recent comments by chief executive Shayne Elliott who said he wanted to "slim down" in the Asian region and become "a smaller, more refined animal going forward".
Elliott had also highlighted that the minority stakes in Asian banks had helped the bank gain a foothold into local markets, by introducing ANZ to banking systems in the various Asian countries, however, moving forward the bank will shift capital and focus to its own operations.
Goldman Sachs has also been in the process of assisting in the sale of ANZ's 39 per cent shareholding in Indonesia's Panin Bank, which was most recently valued at just over A$900 million. That deal has been placed on hold, as there has been limited interest.
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