Sean Joseph, ANZ’s head of global loans and advisory, Asia Pacific, said the lender aimed to build on its strong syndications franchise. Its expansion of specialised finance includes corporate advisory, asset, export and project finance, as well as acquisition finance.
“We already have a strong syndication platform in Asia Pacific, so as a starting point that’s pretty good,” said Joseph.
ANZ is one of the leading loans houses in Asia and last year was ranked second only to Standard Chartered, with 57 deals totalling $7.46bn in G3 currency deals, according to Dealogic.
Joseph said the bank has a two-pronged approach to its strategy — to be more aggressive in underwriting and distribution, and to seek to do more specialised finance business in the countries in which it operates.
ANZ hopes to capture a bigger slice of Asian investment into Australia, business that has helped some of its domestic rivals boost their rankings in Hong Kong and Singapore.
Between 2012-2014, Chinese buyers were the biggest M&A investors from Asia ex-Japan into Australia, accounting for $24.37bn of acquisitions, or half the total activity during the period, according to Dealogic. Singapore followed with $10.06bn, and Hong Kong came next with $5.71bn.
Now, with commodity prices depressed and a weak Australian dollar, plenty of companies are looking like attractive targets. Joseph said firms eyeing Australian assets ranged from Chinese state-owned companies to family-owned businesses in southeast Asia, as well as Japanese companies.
While all the Australian banks have a natural advantage when it comes to advisory and financing services for targets in Australia, ANZ has a head start as it was the first mover in expanding outside Australia seven years ago, said Joseph.
“From an Asian capital perspective we have a much bigger platform to support clients,” he said. “There is no real comparison with other Aussie lenders in our ability to provide technical insight domestically and regionally. We are not just a one-trick pony — for example we have some 2,500 people in Singapore supporting clients in Asia.”
ANZ already has 75 people working in structured finance and global loans and advisory in eight countries. It is looking to incorporate more local talent in Asia, said Joseph. In the last 12 months it has appointed one executive director, two directors and two analysts in its Asian acquisition finance business.
This includes Ng, who has been with ANZ for four years and joined the bank after 10 years at Westpac. He was promoted to his new position in December.
Tough competition
Despite the advantages that Joseph said ANZ enjoys in both Asia and Australia, he was restrained about ANZ’s ambitions for growth. “The market is highly competitive and we are realistic about our ability to grow in a considered manner that provides a strategic upside in opportunities for us,” he said. “It is a relationship-led strategy to provide relevant and scalable solutions to our clients and grow in a sustainable kind of way.”
Abundant liquidity in the market means that the biggest concern is not how to grow, but how to do it profitably, said Joseph. He cited HSBC, the Japanese megabanks, DBS and Standard Chartered as big competitors, pointing out that DBS had been especially impressive in its expansion in Asia.
Institutional move
Joseph is also looking at developing the institutional investor market for longer dated debt in Asia, especially out of Australia.
“There is an opportunity to potentially build out institutional investor appetite in structured project finance as well as some of the longer dated deals,” he said. This is because funding power projects with clean/uncovered risk and with maturities of 15-20 years makes institutional investors more suitable candidates than banks.
But the areas where an institutional market is likely to evolve remain those countries that fall into the investment grade category. Australia is a good place to start, with its transparent legal system and strong pipeline of public to private partnership projects over the next 12-18 months.
The bank is also pursuing financing opportunities for private equity sponsored deals, as well as corporate to corporate M&A situations. While Australia, Singapore and to some extent Korea are where the big PE names have largely concentrated their efforts, Joseph said such buyers would become more active in places like China and Hong Kong too.
The bank’s pipeline for such financing is already looking strong, with ANZ involved in over 20 PE sponsored deals at different levels of involvement, from advisory services to actual funding, said Joseph.
“We have a strong market share in loan syndications, but we’ve only started exploring the structured side of the business in Asia, particularly in the leveraged finance space. So if we grow even 1% in terms of market share, we grow revenue exponentially.”