ANZ agrees to buy RBS Asian units

Tuesday 4th August 2009

Australia & New Zealand Banking Group agreed to acquire Royal Bank of Scotland’s retail and commercial banking operations in Taiwan, Singapore, Indonesia and Hong Kong, and its institutional units in Taiwan, the Philippines and Vietnam.

The much speculated acquisition comes as the U.K. bank, reeling from last year’s U.K. record loss of 24.1 billion pounds on writedowns from the acquisition of ABN Amro’s investment bank, exits investments worldwide to shore up its balance sheet.

ANZ Bank, Australia’s fourth-largest, will take on some 2.1 million clients with the purchase, with a combined US$7.1 billion of deposits and US$3.2 billion of loans, the bank said in a statement to the ASX.

The purchase builds on ANZ Bank’s strategy of expanding in Asia which has seen it take stakes in firms including Shanghai Rural Commercial Bank and Malaysia’s AMMB Holdings.

“The acquisition of these RBS businesses is a further stepping stone in our super regional strategy and creates a new platform for our retail and wealth businesses in Asia,” chief executive Mike Smith said. “The businesses are an attractive portfolio of well-positioned banking assets at a reasonable price.”

The deal will be funded from the proceeds of the bank's institutional placement abd share purchase plan. After the acquisition, its pro forma March 31 Tier 1 capital ratio would be 9.5%, it said.

Shares of ANZ Bank rose 1.5% to A$19.29 on the S&P/ASX 200 Index today and have gained 21% this year. The stock is rated a ‘hold’ based on the consensus of 14 analyst recommendations compiled by Reuters.

ANZ Bank said the deal would be cash earnings per share accretive within two years of completion. Credit Suisse advised the lender on the acquisition.

Businesswire.co.nz

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