ANZ CEO Looks to be like for India, China Growth as Focal level Shifts

A lot of your business is tied to theglobal economic cycle. Let's shorten that time horizon.So over the longer term, things look okay.What does the next 12 months look like to you?What assumptions is the bank making? So for us, just for people watching, Imean our business internationally is intermediated, trade and capital flow soour customers move things in money around most of the Asia Pacific.You're a trade back. Yeah.Yeah. And we facilitate that.You know, whether that's doing currency.

Trades for them or the actual tradeitself. So we get a lot of data in there.Look, it's still very stable. I mean, what we've seen, particularlywith the dominance of China and a lot of those trade flows, that has diminishedjust a little bit. And particularly if you're talking aboutAustralia, New Zealand, part of the world.So we've got more and more diversified places that we're trading, whetherthat's a Thailand or a Vietnam or increasingly an India.So our business is shifting, if that makes sense, sort of geographicallyquite fast as a.

But overall, total volumes that we'reseeing are more or less the same, pretty flat, but there's quite a big shiftunder the covers there between various countries.So, you know, we need to respond to that as being, you know, so we need.So we're building out our capability in places like India or like Vietnam tohelp with that capacity. As we see those those trade flows andcapital flows shift. Which brings me to my next what yourcommitment in the mainland in some ways obviously means that has retreated fromMike Smith's old kind of super regional strategy, which meant heavy capitalinvestment into China.

What is the business strategy on themainland for you guys now? So I think on some measures, we're stillAustralia's largest investor in mainland China.We've got about 300 people there. I mean, we're an on the ground business.We actually have people, we do things on the ground.We're not just selling things remotely. We will go where our customers need us.As I say, we intermediate trade and capital flight.We deal with the world's largest companies, whether they're from theUnited States, European, Australian or Chinese.And, you know, we they need us.

We got.So right now, there is still an enormous demand for our services on mainlandChina. You know, our business there is growing,not shrinking. Same here in Hong Kong.And we'll continue to invest in our platforms and capabilities in Hong Kongand of course, in mainland China. I mean, the retreat from Asia sort ofgot overblown a little bit. You know, the retreat from the superregional strategy that was, by and large retreating from a retail bankingstrategy, which, you know, we just didn't have the scale to compete inthat.

So institutional banking, which is whatwe do particularly well, that is continuing to grow.And in fact, from our perspective and from our shareholders specifically, evenmore importantly, the profitability of that business has significantlyimproved. I mean, years ago when I started, ourinternational franchise had a narrow way of sort of 3%.Today, it's mid-teens and really, really sustainable.And what more can you do outside of Australia and the institutional businessto expand? Well, we've got a strategy that followsour customers.

We have six and a half thousandinstitutional customers globally. Big chunk of those are other financialinstitutions. Most of them are the world's bestmultinationals and we go where they go. And so as they move, as I said, if theyyou know, we know the China Plus one strategy has been intact for quite awhile, and they are out there wanting to invest more in Vietnam and and India,but also places like Japan. We follow.So we go there as well. And we build our capacity to follow tofollow them. You mentioned six and a half thousandinstitutional investors.

I mean, that number has shrunksubstantially. Yeah, from, I think, nearly 30,000trips. Does that number stay or do you see thatfalling even further? No, I don't think it'll fall further.I think it is pretty stable. It might be a little bit of growth inthe. We certainly have no ambition to reduceit. I mean, Astrid, you know, we're prettycomfortable. We've got the right six and a halfthousand will always be people we need to add to the list.But none of that is about the right.

Scale for us.I mean, institutional banking is a risky business.Take a look. You know, we've got a lot of balancesheet out to those customers. And, you know, our philosophy is we'drather sort of know these people really, really well.And six and a half thousand is about a number you can get your head around andand know certainly the big end of that list literally intimately and Nitinreally, really well. What about your non-core internationaldivestments right. You did recently cut your stake inAmbank.

You haven't quite found a buyer forPenang Bank just yet. What what's the outlook there?So we only have those. We have three what we call partnershipstake. So they were minority investments.We've actually sold quite a few over the years, but yes, we've just sold 16 and ahalf per cent of ambank. We've made it very clear they don'treally have a place in our portfolio, our strategy going forward.So, you know, we are we are actively looking to find alternative buyers forthose. So it's something that we spent a bit oftime on.

It was a good step forward for us tosell the Ambank stake. We're really pleased with that.We had a great relationship, but we need to move on.They need to move on and they're better to have a more stable shareholderspension. Same thing.We work really closely with our partner shareholders, but we look for a solutionthere and then we have a small stake in China, Bank of Tianjinand on those two pan and banking back of change.And you have a timeline for that. Is there an ideal time where you.I wish I did in the sense that I don't.

Get to control the timeline on thosethings. I mean, look.Well, what would you like? To see it before we would like.We are not helpful shareholders of. I'm being very honest to either of thoseparties. You know we our strategy is change.You know, we don't have the resources to really lean in and contribute to either.So we're probably more of a problem for them than than not.So the time it you know, if I'm being totally honest.And so, look, I think the sooner we can just find more appropriate shareholderswho can actually help because both are.

Good franchises and they need somebodyis going to lean in as a supportive partner.Not to say we're not supportive, but I just don't think we're the bestshareholder for either party. So the sooner we can clean those thingsup, I think the better. Yeah, I mean, domestically, you know,the court cleared this takeover of Suncorp for you guys, which is obviouslygood news for ANZ. Are you expecting more consolidation inthe banking space? I expect that that I mean we still haveover 100 banks in Australia. A lot of them are very, very small.The reality and it's down over time.

I mean the reality is globally andparticularly in Australia, banking is a scale game and it's a scale game largelybecause of regulation, compliance, things like cyber security or all ofthose, you need real scale keep out of service your customers.Well in a world of technology and you know, that makes it more and moredifficult for the small and the regional, what we call the regionalbanks and the mid-size that people have got, you know, two, three, 4% marketshare becomes more difficult. I'm going to give you an interestingstat, ANZ, we spend more on cyber security than Suncorp spends on all ofits technology, right?.

So it just gives you a sense of the sortof scale you're talking about. You know, you can't say to yourcustomers we're slightly less secure, but that's okay because we're small.You know, there's a there's a minimum bar.You have to be at the top of your game. And so I think scale is becoming moreand more important. That's not to say there is not a very,very important role for regional banks to find a point of, you know, a niche, aspecialisation, something they can do very, very well.And, you know, some of them are doing quite well.Well, I think there will be further.

Consolidation.You you're sitting on some, some cash. Right.You, you've raised some cash and divestments and you know some of thecapital requirements like you know, have a, you know, a representative office.You have that money too. And I'm wondering whether you're lookingat using that for any acquisitions. You mentioned we talked aboutconsolidation. Are you actively looking to buy assetsin Australia? No, not really.I mean, Suncorp is a big one for us is is $4.9 billion.I mean, we this is this is from our.

Perspective, a really high qualityasset. And you know, we really firmly believewe better drive better outcomes for their customers once they're part of theANZ stable. We've got our hands full doing that.These things are complicated as you can imagine.We've got to move 1.2 million customers from Suncorp Bank across into oursystems that'll keep us busy. Remember, we're also doing our own work.We've essentially launched a whole new bank in Australia called ANZ Plus, whichis, you know, digital through and through platform, really exciting and weare migrating all our customers onto.

This.So we've got our hands full. We've already got 650,000 customers ontothat platform, which is really exciting. So we've got we got a lot on now.We're not actively out looking for acquisitions in Australia.We always keep an eye open. You never know.You've got to you've got to stay close to the ground, particularly here inAsia, where things move really quickly. But there's nothing actively beingpursued at this point. I would ask you about overall successionplans. I mean, you are the longest serving CEO,Australian banking CEO, your eight years.

At the helm.Is there a succession plan in place? There's always been a succession plan.I mean, globally I'm still a baby. I guess it's nothing.I'm only just getting started. Oh, look, I succession planning issomething the board and I take very seriously.Obviously, as time goes by, you take a more seriously, as you can imagine.So look, we're very lucky to it. We've built a really fantastic cadre ofleaders. Many of them have sit in the chair here,actually have met some of them. Yes.We've got a good talent pipeline of of.

Business leaders, etc..So that's my job is to make sure that when the time comes, the board has thebest possible choice. And, you know, would you like to staylonger? I love I love the job.I love doing what I'm doing. I feel very privileged to lead such agreat organisation and I sit I'm still really energised about it.I mean, I say to a lot of our young people actually when you sign up forbanking, you are signing up for change. I mean the industry is changing really,really fast and you have to be excited about that change and the opportunitiesthat new technology brings.

You know, the latest thing we're alltalking about, obviously generative AI and that's going to you know, that'sgoing to fundamentally reshape the landscape of banking.I find that stuff interesting. I find it exciting.And, you know, as I said, it's a privilege to lead the group.

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