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ANZ’s CEO Andrew Geczy. Photo: Aniruddha Chowdhury/Mint
ANZ’s CEO Andrew Geczy. Photo: Aniruddha Chowdhury/Mint

ANZ looks beyond servicing very large companies in India

The Australian bank aims to service India's growing trade within the Asian continent says CEO Andrew Geczy

Mumbai: Australia’s third largest bank by assets Australia and New Zealand Banking Group Ltd (ANZ) is planning to service smaller Indian companies with global ambitions to widen its presence in the country.

ANZ, which is present in 33 countries, including its home market, has been so far focusing only on multinationals. Currently the Melbourne-based bank provides loans to large corporates and offers debt capital market services to companies looking to borrow overseas.

ANZ aims to service India’s growing trade within the Asian continent, which is growing at an “astronomical rate of 300% a year", said Andrew Geczy, chief executive officer (CEO), international and institutional banking of the bank, in an interview on Thursday.

“There is probably the layer underneath the very very big corporate customers who are still international and have international aspirations but may not be as global as the larger ones. They might have business in two or three countries outside India. That segment, which also has an international outlook and banking needs, we will be spending time building relationships with," Geczy said.

Launched for the second time in India in 2011, ANZ is slowly finding its feet. It had exited India in 2000 after selling its business here to Standard Chartered Plc. The buy helped make Standard Chartered the largest foreign bank in India with 100 branches.

Currently the bank has only one operational branch in Mumbai; two are being set up in Gurgaon and Bengaluru. But its limited operations in India have been profitable so far. Disclosures on its website showed that net profit as on March 2014 had increased to 50.54 crore from 4.30 crore in the previous year. Geczy declined to give the latest numbers but said that both revenues and profits in India are growing at “double digits".

Mandatory Basel III disclosures made by the bank on its website showed that ANZ’s total loan book, including fund and non-fund based exposure, has increased to 2,760 crore in December 2014 from 2,304 crore in December 2013.

The bank aims to earn 30% of its profits from Asia by 2017. “We are very close to our target and are confident of achieving it. In India it means we are investing more capital here to finance our business here. We are not going to shy away from our aspirations in building a super regional bank and that means we will have to invest and continue with our plans in less and more volatile times," Geczy said, but did not give the amount of capital ANZ has invested in India so far.

In an interview with Mint in March 2014, ANZ CEO Michael Smith said the bank had invested $260 million in the country since it opened the branch in September 2011.

According to Saurabh Tripathi, partner and director at Boston Consulting Group (BCG), in order to be successful, banks such as ANZ will have to target corridors and sectors in which they are strong.

“Corporate banking is crowded market. For corporate clients, coverage is important. Banks have to offer these customers a total suite and service all their needs," Tripathi said.

According to ANZ’s calculations, India is likely to emerge as one of the top five trading partners of Australia by 2020, which would give the bank an opportunity to service clients trading with Australian firms. Geczy, however, cautioned that for the Indian economy to continue growing, the next three to five years will be crucial.

“The opportunity in India is manifest but because of the demographic challenge India faces, you have only a limited window to get a certain number of people employed in the economy and if you don’t do that, you will not have enough people to grow the economy to the next stage," Geczy said.

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