Major bank sells stake in foreign ADI

ANZ has announced that it has officially sold its 20 per cent stake in Shanghai Rural Commercial Bank (SRCB).

The Australian lender aims to reinvest $1.5 billion in the share market as part of its capital management plan, and it claims that the SRCB sale will offset the impact of its on-market share buyback.

In order to “neutralise” the effect of its dividend reinvestment program, ANZ has purchased approximately $500 million worth of shares on market.

ANZ’s chief financial officer, Michelle Jablko, stated that the move would enable the bank to return “surplus capital” to ANZ shareholders (while still complying with restrictions set by the prudential regulator), with ANZ’s CET1 capital ratio remaining “broadly” unchanged.

“ANZ’s strong capital position, combined with the progress made in simplifying our business, means we are now in a position to commence returning surplus capital to shareholders while still complying with APRA’s unquestionably strong capital requirements,” Ms Jablko said.

ANZ also recently completed the sale of its life insurance business to Zurich Financial Services Australia, and noted that such “non-core business” sales will allow it to pursue further capital management initiatives in the future.

Following the sale of its life insurance business, the bank’s chief executive officer, Shayne Elliott, said that the bank is “almost halfway through” its simplification process, which has also involved selling some partnership stakes in Asia.

“We’ve sold quite a number of businesses. In fact, I think at last count up to about 17 disposals, some big and obviously a lot quite small. So, I think we’ve really got momentum on that. We’ve reduced the number of products that are available in our branches, which is again another important part of simplification,” Mr Elliott said. 

“It all goes back to this really simple philosophy that in a complex world, we know that our customers are busy and just want us to help them out.

“The way to win for our customers and our shareholders is to do a few things and do them incredibly well. We’re really clear on what those few things are and essentially we are just exiting, shrinking or partnering on everything else. We’re more than halfway through. But we still have a long way to go.”

[Related: ANZ offloads life insurance business for $2.85bn]