ANZ May Bid $3 Billion for RBS Asia Assets, SCMP Says

ANZ May Bid $3 Billion for RBS Asia Assets, SCMP Says

Feb. 28 (Bloomberg) -- Australia & New Zealand Banking Group Ltd. may bid as much as $3 billion for the Asian operations of Royal Bank of Scotland Group Plc, the South China Morning Post reported today, citing people it didn’t identify.

ANZ, Australia’s third-biggest bank by assets, has hired Credit Suisse Group AG to advise on the purchase, which would include RBS’s Hong Kong and China businesses that employ 1,400 people, the paper said.

The Melbourne-based ANZ is most interested in RBS branch networks in Australia, China and India, according to the report. Chief Executive Officer Michael Smith, who joined the bank after heading HSBC Holdings Plc’s Asian operations, is spearheading ANZ’s expansion into the region.

“If you want to enter the growth engines in Asia, such as China and India, this is the time where you can find more willing sellers or pay a less demanding valuation,” Winson Fong, who helps oversee $2 billion at SG Asset Management Hong Kong Ltd., said today in a telephone interview.

ANZ aims to double profit by 2012 through acquisitions in Asia. Smith reaffirmed plans to seek 20 percent of ANZ’s revenue from the region by then, the Australian Financial Review reported last month. The Melbourne-based bank wants to acquire Asian rivals that are now within reach after share prices were dragged lower by a slowdown in China, the paper cited Smith as saying.

Asian Experience

Smith’s experience in Asia may make it easier for ANZ to integrate businesses acquired, Fong said. “Buying and selling is very easy; how they are going to execute their strategy is a bigger challenge. ANZ needs his expertise,” he said.

Goldman Sachs Group Inc.’s Hong Kong-based analyst Roy Ramos credited Smith with HSBC’s growth in Asia when his departure from HSBC was announced in June 2007.

China Merchants Bank Co., one of the nation’s fastest- growing lenders, trumped ANZ’s bid to buy control of Hong Kong’s Wing Lung Bank Ltd. in June.

ANZ has instructed a Hong Kong-based “headhunting” firm to ask if some of RBS’s investment bankers in Asia are interested in moving over, the South China Morning Post said.

Standard Chartered Plc may still be examining a potential bid for some assets, the paper reported. RBS advisers Morgan Stanley and UBS AG will send a detailed memorandum on what is for sale to interested buyers, including ANZ, Standard Chartered, HSBC, the Industrial & Commercial Bank of China Ltd. and Bank of China Ltd., the report said.

Credit Crisis

Edinburgh-based RBS was hurt by former Chief Executive Officer Fred Goodwin’s 14.3 billion-euro ($18 billion) takeover of ABN Amro’s investment banking and Asian assets, announced in March 2007, three months before the credit crisis began. Goodwin was ousted in October after the government agreed to take control of the bank. The lender posted a record 28 billion-pound ($40 billion) loss for 2008.

ANZ’s current market value of $18.5 billion compares with RBS’s $16.4 billion, a sharp reversal of fortune since the global credit crisis began, according to data compiled by Bloomberg. The Melbourne-based bank’s shares fell 13 percent this year, compared with a 53 percent slump for RBS.

ANZ spokesman Paul Edwards and Morgan Stanley’s Hong Kong- based spokesman Nick Footitt couldn’t be reached immediately for comment. RBS’s Hong Kong-based spokeswoman Hui Yuk-Min, Sheel Kohli, a Hong Kong-based spokesman at Credit Suisse, and Mark Panday, a Hong Kong-based spokesman at UBS, declined to comment.

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