ANZ to challenge NAB on business front
(21 March 2010 – Australia) Australia and New Zealand Banking Group has spelt out plans to challenge rival National Australia Bank’s dominance of the small and mid-sized business market.
The bank has set the ambitious goal of becoming the second biggest player in the sector within the next three years.
Phil Chronican, ANZ’s Australian head, has cautioned that banks would need to prepare for years of low business lending growth, with many commercial customers reluctant to draw on debt.
Mr Chronican said the bank, current in fourth place, would bi-pass Westpac and a combined Commonwealth Bank and BankWest to become the second biggest player in business banking in Australia by 2014.
Much of this growth would come from NAB, Mr Chronican said.
The pledge came as ANZ last week spelt out plans to push deeper into Asia, setting a target to generate nearly a third of group profits from the region by 2017.
The push by ANZ into business banking comes as cross-town rival NAB has focused in recent months on aggressively building its share of retail banking, mostly through targeting customers of its big three rivals.
Business lending generally offers bigger profit margins than selling mortgages. However, growth in the market has been anaemic since the global financial crisis hit.
Even with signs of business investment rebounding, Mr Chronican said demand for credit hadn't fully returned, given many companies were still cautious over borrowing.
'We need to get used to, at least for a couple of years, relatively low growth in the balance sheet,'' he said.
''We do expect commercial lending to show some growth but we're not expecting it to be above low single digits.'
Phil Chronican, ANZ’s Australian head, has cautioned that banks would need to prepare for years of low business lending growth, with many commercial customers reluctant to draw on debt.
Mr Chronican said the bank, current in fourth place, would bi-pass Westpac and a combined Commonwealth Bank and BankWest to become the second biggest player in business banking in Australia by 2014.
Much of this growth would come from NAB, Mr Chronican said.
The pledge came as ANZ last week spelt out plans to push deeper into Asia, setting a target to generate nearly a third of group profits from the region by 2017.
The push by ANZ into business banking comes as cross-town rival NAB has focused in recent months on aggressively building its share of retail banking, mostly through targeting customers of its big three rivals.
Business lending generally offers bigger profit margins than selling mortgages. However, growth in the market has been anaemic since the global financial crisis hit.
Even with signs of business investment rebounding, Mr Chronican said demand for credit hadn't fully returned, given many companies were still cautious over borrowing.
'We need to get used to, at least for a couple of years, relatively low growth in the balance sheet,'' he said.
''We do expect commercial lending to show some growth but we're not expecting it to be above low single digits.'
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