Mon, Oct 03, 2011 page12

• INTERVIEW: ANZ Taiwan still optimistic about growth

  ANZ Taiwan, the local branch of the Australia and New Zealand Banking Group, remains optimistic about growth this year despite a certain uneasiness about the global economic outlook. Taiwan branch CEO Terry King shared his views about the bank’s development plans in Taiwan during a recent interview with a small group of reporters, including ‘Taipei Times’ staff reporter Crystal Hsu

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  Taipei Times: The global financial markets have seen wild swings of late, making the economic landscape increasingly uncertain. Has the market volatility resulted in any changes to ANZ Taiwan’s operations?

  Terry King (經天瑞): The global financial markets have seen roller-coaster rides for the past weeks, indicating that the world’s economic cycles are growing shorter than in the past. Banks that have solid knowledge of customers can better survive volatility and upheaval. They cannot dance to the tunes of markets like [securities] traders.

  ANZ has been in Taiwan for three decades after setting up its first branch in 1980. We have a deep grasp of the clientele and the market. We aim to forge long-term sturdy relationships with our customers, whether in corporate or consumer banking.

  

  ANZ Taiwan CEO Terry King is seen in an undated photograph:

  Photo: courtesy of ANZ Taiwan

  We are not newcomers even though the group purchased Royal Bank of Scotland Group’s (RBS) retail, wealth management and commercial banking businesses here last year.

  TT: How will ANZ Taiwan differentiate from competitors now that domestic lenders are also allowed to provide yuan deposits, conversion, remittances and other services?

  King: The issue is food for thought. I’m thinking about it myself. There is no longer a competitive edge if all lenders are put on an equal footing. Large foreign banks will set up subsidiaries in Taiwan. When all provide overlapping services, their management and efficiency and quality of service will make the difference, which will take some time to become evident.

  TT: You mentioned early this year that ANZ Taiwan would make mortgage loan expansion its key growth driver this year. How is this plan faring after the government introduced the luxury tax on June 1 to cool the housing market?

  King: Mortgage loans continue to grow every month. Our mortgage operations are quite modest compared with those of our peers. Home loans totaled NT$10 billion [US$328 million] as of last month, leaving ample room for growth. We have not actively built up this segment, but are getting more aggressive. Still, we will limit the operations to urban areas [to avoid downside risks].

  We welcome the series of measures aimed at regulating the property market because they help level off the playfield and save us the trouble of setting the [credit] limits.

  TT: When will ANZ upgrade its branch here into a subsidiary?

  King: We have approached the matter in a steady manner. We plan to file an application in December and the subsidiary is likely to come into being in the second half of next year. The regulatory -requirement to cap loans by subsidiaries to their parents overseas at 50 percent of their net worth will not affect ANZ. We seek to lend money absorbed from customers.

  We also plan to open a flagship branch in a place in Taiwan where people cannot ignore its presence. The timing and location are still under study. ANZ now has 17 branches in Taiwan and can set up a dozen more under the acquisition terms.

  TT: Will loan demand slow for the rest of this year and next year?

  King: It is too early to tell. Things change so fast that no one knows what will happen next and how. It is true when the global financial crisis struck in the fall of 2008, export orders dried up in January the next year. Once the eurozone works out solutions for the debt crisis, things may return to normal again. Taiwan’s economy, heavily reliant on global trade, is vulnerable to external exchanges.

  TT: Major banking groups around the world have unveiled leverage and headcount reductions for the coming years to shore up capital and cut costs. Will ANZ do the same amid growing economic uncertainty?

  King: That is not a worry for ANZ, which has an “AA-” credit rating and is ranked as one of the world’s safest banks. For better or worse, the bank has emerged from several financial crises unscathed. We have been making organizational adjustments to cope with market changes. Overall our staff here is growing. We have been adding mortgage loan staffers while taking a cautious approach to credit lending.
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