Chillin' out till it needs to be funded
ANZ will buy Royal Bank of Scotland’s operations in six Asian countries for $550m A$687m in a deal that underlines the ability of Australia’s strongly capitalised banks to acquire assets for highly competitive prices from struggling international peers.
ANZ, which wants to generate a fifth of its earnings from Asian operations, will buy RBS’s retail, wealth management and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, as well as the UK bank’s institutional banking businesses in Taiwan, the Philippines and Vietnam.
The news sent ANZ shares up 1.5 per cent to A$19.28. RBS shares opened 1p or 47.47p in London.RBS, which reports first-half results on Friday, has been in talks with ANZ and the UK’s Standard Chartered for months over the sale of its retail assets in Asia as it tries to shrink its balance sheet.
The assets include 170 branches, with 28 in India and 13 in China. StanChart has been interested in acquiring RBS units being sold in China, India and Malaysia.In total, the assets were expected to fetch about $1bn-$1.5bn.
RBS said on Tuesday it was in “advanced discussions” with bidders for the remaining assets in Asia it had decided to sell. It said the sale to ANZ was at a $50m premium over book value.
Australian banks have completed a number of transactions with UK financial services groups over the last year, led by Commonwealth Bank of Australia’s purchase of HBOS’s Australian subsidiary Bankwest for A$2bn.
Mike Smith, ANZ chief executive, said the acquisition of the RBS businesses was a stepping stone in the bank’s “super regional strategy” and created a new platform for its retail and wealth operations in Asia.
ANZ wd have had to divest the India China Malaysia assets later if Stanchart had not stepped forward. Now the middling Stanchart has 41 new branches in India and China. The private banking and corporate investment banking business has not been sold. ANZ has finally not closed the sale in India, China or Malaysia because regulation in India and the lack of premium in China are both making the discussion disengaging and arbitrarily poised like a scrum to play a cricket test.
New Year Update: As of October 2009, ANZ has wound up purchasing ING’s partnership interest in the JV down under giving ING a clear $300 million profit on the wealth operation and $1.5 billion in Dutch Cash to pay its government..The other Asia units remain