Continuing its strategic wind up of long-held Asian interests, the ANZ has agreed to sell its retail business in Vietnam, allowing the Australian major to further drive focus to its core institutional interests.
The ANZ’s Vietnamese retail business, subject to regulatory approval, will be sold to Shinhan Bank Vietnam, a unit of South Korea's Shinhan Financial Group, the ANZ said in a statement. The South Korean conglomerate is listed on both the Korean and New York stock exchanges and has interests across Asia.
ANZ has had a prominent retail presence across Vietnam’s largest two cities - Hanoi in the north and Ho Chi Minh City (pictured) in the south - with the core retail set up comprising eight key retail branches in the central business and trade disticts of both Hanoi and Ho Chi Minh City, serving 125,000 customers.
The operation includes A$320 million (US$240.9 million) in lending assets and A$800 million in deposits.
“The sale of our retail business is in line with our strategy to simplify the bank and improve capital efficiency," ANZ group executive, International, Farhan Faruqui said. “It allows us to focus resources on our largest business in Asia - Institutional Banking - where we are a top four corporate bank supporting regional trade and capital flows,” he added.
According to Faruqui, the bank has a long history in Vietnam and will maintain a presence through its Institutional Bank and its corporate clients in the Greater Mekong Region.
ANZ in Vietnam
One of the first foreign banks to open a branch in Hanoi in 1993, ANZ Vietnam grew its original team of 28 employees to 550, working across eight locations in Hanoi and Ho Chi Minh City. In 2008, ANZ won a licence to open a fully foreign-owned bank in Vietnam as a part of former CEO Mike Smith's broader Asia strategy.
In 2009, ANZ paid $550 million to buy several Asian business units, including the Vietnamese one, from British lender Royal Bank of Scotland (RBS). However, in early 2016, ANZ closed its business lending to small and medium-sized enterprises in five Asian countries, including Vietnam. The bank will also look to exit its retail and wealth assets in the Philippines and Vietnam.
Five banks reportedly submitted bids for ANZ’s Vietnamese retail unit, with the Vietnam deal following the announcement in October last year of the sale of ANZ’s retail and wealth business in five Asian countries to Singapore's DBS, trimming the fat from businesses in Hong Kong, mainland China, Singapore, Taiwan and Indonesia.
CEO Shayne Elliott has spoken repeatedly of his intention to simplify ANZ’s business model, focus on the bank’s core business strengths and build on the lender’s robust institutional banking operations at home and abroad. ANZ’s Institutional operations enjoy a significant presence in 15 different markets in Asia and was ranked as a top four corporate bank in the region by Greenwich Associates in 2016.
The financial terms of this latest deal have not been disclosed as yet, however in a statement the bank noted the premium to book value for the sale of the retail business in Vietnam is not material to the ANZ Group. Subject to regulatory approval, ANZ expects the transfer of the Vietnam retail business to Shinhan Bank Vietnam will be complete by the end of 2017.