Products, presence and people – ANZ’s competitive advantage in ASEAN

When an Australian client approached ANZ recently seeking help to establish a processing factory in Vietnam, the bank immediately recognised a business opportunity that could benefit both parties.

The client would require guarantees, performance bonds and export letters of credit. Plus the involvement would allow ANZ Vietnam to support the project and develop a relationship with local partners. Negotiations were soon underway. An opportunity now exists for ANZ to help clients at both ends of the transaction and develop new relationships in the region.

This is one example among many of how the bank’s on-the-ground presence in members of the Association of Southeast Asian Nations (ASEAN) is helping more and more organisations wanting to do business with Australia and vice versa.

“It’s becoming increasingly important for businesses buying from or selling to ASEAN countries to tap into the kind of market intelligence our knowledge and expertise can deliver,” says Alan Huse, ANZ’s Australian Head of Trade and Supply Chain.

Strong franchises

The ANZ network covers many of the ten members of ASEAN, either via full branches or in some cases through partner banks. It has strong franchises in most of these countries, some of the more prominent ones being in Indonesia, Vietnam, Malaysia, Cambodia and Laos.

In these member countries, too, the bank combines traditional trade solutions with structured advisory, including trade risk management, fund raising and financial markets. The work of the relationship managers is complemented by operations and trade sales and services teams.

Building relationships

The depth and reach of its presence allows ANZ to provide more – much more – than routine trade services. If a client in Indonesia is exporting to Australia, for example, ANZ can help its people to understand the market they’re dealing with, explains Alan Huse. On the other hand if the bank has an Australian client importing from Indonesia or selling to them, it can make them aware of potential pitfalls and gain valuable market intelligence on their behalf from its Asian offices.

Often such arrangements lead to new business opportunities. For one client this year, ANZ issued a series of documentary credits to facilitate the purchase and import of equipment to build a biodiesel plant in Malaysia. It has since helped its partner bank facilitate a relationship with that company.

Gearing for growth

The demand for this kind of help is growing along with the burgeoning importance of ASEAN countries to Australia.

Despite the slowdown in trade volumes in recent months resulting from the global downturn, ANZ’s Asian business has continued to experience strong growth in profit and revenue, says Alan Huse. The effects of the financial crisis have been offset by the acquisition of more customers and general expansion of the business. Indeed Asia remains the key growth platform for ANZ.

“We believe Asia will not only survive the current crisis but come out of it sooner and stronger than the Western world,” says Alan. “Since the Asian crisis of the ‘90s, ASEAN countries have made great progress in getting their economies in better, more stable shape with continued strong demand for domestic infrastructure and consumption.”

At the same time they’ve experienced big expansion in manufacturing, particularly in Vietnam and Malaysia. Vietnam has attracted many Taiwanese and Korean companies which have moved their manufacturing base from China. This shift is likely to accelerate in Indochina for the same reason these businesses moved to China 10 to 15 years ago – relatively cheap, hard-working, skilled workforces.

The economic strength of ASEAN countries and other Asian nations is of vital significance for Australia and a prime reason trade is such a key product offering for ANZ, says Alan Huse. The Asian clientele includes traders in countries that manage huge import and export volumes. “With our trade capabilities in the region and a trade team in every country, structuring and managing trade finance solutions for clients while managing the cross-border risks is obviously of key importance.”

Cutting paperwork, saving time

As customers can attest, ANZ’s web-based trade processing services platform provides a distinct competitive advantage by simplifying the movement of documents. This cuts paperwork associated with trade flows and saves time and money. A “point-of-destination” processing approach to documentation can benefit exporters who may have annual turnover held up by payments due on shipments they’ve already made.

ANZ’s capabilities have been acknowledged by many recent awards including Global Finance Magazine’s Best Trade Finance Bank in Australia (2009). Accolades in 2008 included Finance Asia Magazine’s Commercial Bank of the Year prize.

In its trade proposition another essential business is structured export finance – working at the longer end of the trade curve. In this ANZ works closely with entities such as EFIC, the Australian federal government agency that promotes and finances Australian exports together with its counterparts in other parts of the world.

“We’ve been closely involved in that business in ASEAN countries, helping to arrange deals and pulling the balance of financing together,” says Alan. “This is a tool more common in Asia where developing economies need access to long-term capital and can’t get it easily.”

At the heart of the ANZ offer, as always, is a desire to understand clients’ businesses, the political and social issues they face in marketing their products overseas and being flexible about creating solutions. “And it’s still one of the main reasons any company dealing with ASEAN countries should consider us,” says Alan Huse.

Tags: ANZ, ANZ Vietnam, bank, banking, Finance, market intellegence, trade, trade and supply chain, trade finance
Posted in Australia, Singapore |