Major bank to sell $11bn loan portfolio

A big four bank will offload $11 billion in gross loans and advances and $7 billion in credit risk weighted assets as part of a major sale of its Asian operations.

ANZ today announced that it will sell its retail and wealth business in Singapore, China, Hong Kong, Taiwan and Indonesia to DBS Bank.

“Businesess being sold include ~$11 billion in gross loans and advances, ~$7 billion in credit risk weighted assets and ~$17 billion in deposits,” ANZ said in a statement.

“The sale price represents an estimated premium to net tangible assets at completion of approximately $110 million.”

Commenting on the transaction from Hong Kong, ANZ CEO Shayne Elliott said the major lender’s strategic priority is to create a simpler, better capitalised, better balanced bank focused on attractive areas where it can carve out winning positions.

“Asia remains core to ANZ’s strategy. This transaction simplifies our business while allowing us to continue to benefit from higher levels of growth in the region through a focus on our largest, most successful business in Asia — banking large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand,” Mr Elliott said.

“By focusing our resources in Asia — whether that is capital, technology or people — on institutional banking, we can continue to build a world-class, capital efficient business by strengthening our network and the support we provide to our key institutional clients,” he said.

“In retail and wealth, although we have grown a profitable business in Asia, without greater scale ANZ’s competitive position is not as compelling.

“Having looked carefully at the business in recent months, it is clear the environment we face has changed and to make a real difference for our retail and wealth customers, we would need to make further investments in our Asian branch network and digital capability. Further investments do not make sense for us given our competitive position and the returns available to ANZ,” Mr Elliott said.

The sale is expected to increase ANZ’s CET1 capital ratio by 15-20 basis points.

The transaction is subject to regulatory approvals in each market with completions anticipated over the next 18 months progressively from mid-2017.

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