The Australia & New Zealand Banking Group Limited - Analysis
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The Australia & New Zealand Banking Group Limited (ANZ) GBMP 528 – 01 (Instructor: Cesar Polvorosa) Final Group Presentation Group #8 (South East Asia/ANZ) - Arcadians Inc. Chandra Vijay Dubey, Jitin Sharma, Kamal Krishan, Kamran Mahboob, Mohammad Wamique Siddiqui, Sher Hassan Mazari, Subhasis Pal, & Surinder Singh
Transcript
1. The Australia & New Zealand Banking Group Limited (ANZ)
GBMP 528 01 (Instructor: Cesar Polvorosa) Final Group Presentation
Group #8 (South East Asia/ANZ) - Arcadians Inc. Chandra Vijay
Dubey, Jitin Sharma, Kamal Krishan, Kamran Mahboob, Mohammad
Wamique Siddiqui, Sher Hassan Mazari, Subhasis Pal, & Surinder
Singh
2. Table of Contents Region Profile Introduction The Role of
Geography and the Firm The Role of Culture and the Firm Firm
Strategies Opportunities & Challenges Conclusion Slide:
2/21
3. Region Profile: South East Asia Sources: Wikipedia, CIA
Factbook, Atlapedia & World Bank Population: 610,000,000 &
Population Growth Rate: 35% Population Density: 135.6 /km2 &
Life Expectancy: 72.2 years Major Languages: Kadai, Austronesian,
Austroasiatic, HmongMien, Sino-Tibetan Major Religions: Hinduism,
Buddhism, Islam & Christianity Gross Domestic Product (GDP):
$2.158 trillion Sectorial Share in GDP: Agriculture, Industry,
Services Slide: 3/21
4. Introduction Banking is a key industry, critical to the
survival of the economy and the health of a society. ANZ Bank
history dates back over 175 years. ANZ is one of the five largest
and most successful listed companies in Australia, and we are the
number one bank in New Zealand. ANZ offers full range of banking
options, including Personal, Rural, Corporate, Commercial,
Institutional and Private Banking. Nearly one in every two New
Zealanders have a banking relationship with one of ANZ brands.
Slide: 4/21
5. Introduction Contd. Australia has enjoyed 21 years of
consecutive economic growth the best performance of any developed
country, and a trend that is forecast to continue. ANZ Bank aims to
become a super-regional bank. ANZ National is in effect regulated
by both the Reserve Bank of New Zealand (RBNZ) and Australian
Prudential Regulation Authority (APRA). It has an exciting ambition
to become a super-regional bank providing the scale and quality of
a global business to customers in our core markets of Australia,
New Zealand, Asia and the Pacific. Slide: 5/21
8. The Role of Geography and the Firm Contd. In the beginning
when the business plans are creating or making decisions, its very
important to scan the external environment. This can be achieved
through a PEST analysis, i.e. an investigation of the Political,
Economic, Social and Technological influences on a business:
Political Influence Economic Influence Social Influence
Technological Influence Slide: 8/21
9. The Role of Culture and the Firm Cultural Setting &
Performance Population: Australia: 23 million New Zealand: 4.5
million Diversity: Operates in 32 countries, which speaks 91
languages, 84 religions and a workforce of 123 cultural
backgrounds. Employees: 48000 in which 55% are women. Profits:
September, 2013 A$ 6.5 billion (Source: Bloomberg, 2013) Slide:
9/21
10. The Role of Culture and the Firm Contd. Opportunities:
Customers General Customers: Everyday banking account, savings
account, insurance products and internet banking. Agribusiness:
Banking advice, investment and finance facilities. Corporations:
Dedicated banking facilities like anz@work program. Opportunities:
Employees Commitment towards the Aboriginals, Torres Strait and
Islander people of Australia and New Zealand. Overseas operations
provide employment opportunities to local people and also promotes
cross-cultural working in the bank. Slide: 10/21
11. The Role of Culture and the Firm Contd. Challenges
Contradictions with government policies of various countries
Serving the community with best and up-to date facilities Tough
competition posed by the competitors Political conditions and
government policies in home country Slide: 11/21
12. Firm Strategies Super Regional Strategy: Strengthening
Pre-existing Business in Australia, New Zealand, and The Pacific.
Establishing a significant presence in key APEC & ASEAN
markets. Building connectivity to support clients operating within
and across the whole Region. Providing Customers with the Best
Financial Products & Monetary Solutions to help them Grow.
Slide: 12/21
13. Firm Strategies Contd. Corporate Responsibility Framework:
Improving governance structure & Risk management. Building more
Financial capabilities for low income clients. Creating Education
& Employment opportunities for the communities. Bridging the
Urban & Rural Divides through extending banking access.
Supporting urban sustainability to reduce environmental footprints.
Slide: 13/21
14. Firm Strategies Contd. Community Oriented Focus: Deep
understanding of customer needs and requirements. Providing
customers with the right financial solutions and insights to help
them progress. Supporting customers facing financial hardship
through flexible Micro-Financing & Re-financing. Reach out to
small and medium scale businesses, such as Agriculture, industries,
services, and infrastructure/construction companies. Launching
branch transformation and greater focus on new consumer
technologies and channels all aimed at fostering an improved
customer experience. Fluent investment flows to community based
organizations. Slide: 14/21
15. Opportunities & Challenges: SWOT Analysis Strengths
Weaknesses Opportunities Threats ANZ strong market position
sustained through increasing footprint Deteriorating expense
management impacting adjusted profits Expansion into China could
provide long term growth avenues Regulatory hurdles in strategy
implementation Diversified product portfolio reduces the business
risk of ANZ High reliance on wholesale funding Turnaround in
Australian economy Competition likely to intensify between banks
and NBIs Strong financial position providing resilience to adverse
market developments Lack of scale in Asia limiting its ability to
implement superregional strategy Regulatory changes regarding
covered bonds could make refinance easy and less costly Increasing
incidence and severity of frauds Slide: 15/21
16. Opportunities & Challenges: SWOT Analysis Contd.
Strengths: ANZ strong market position sustained through increasing
footprint. It is one of the Big 4 (ANZ, CBA, NAB, and WBC) banking
groups in Australia. The group's increasing footprint enables it to
sustain strong market position which in turn enables it sustain
recurring profitable business. Diversified product portfolio
reduces the business risk of ANZ. It essentially follows a
bancassurance model with a presence across the value chain in
retail to corporate to wealth management businesses. This business
model has allowed it to diversify its revenue streams. Slide:
16/21
17. Opportunities & Challenges: SWOT Analysis Contd.
Weaknesses: The groups operating costs increased at a higher
compounded annual growth rate (CAGR) of 12.8% when compared to
revenue expansion rate of 7.7%. Moreover, the groups cost to income
ratio deteriorated from 42.2% to 45.9% indicating weakness in
expense management. Slide: 17/21
18. Opportunities & Challenges: SWOT Analysis Contd.
Opportunities: Australian economy is expected to show a substantial
turnaround. In 2011, the economy grew at a modest annual growth
rate of 0.2% when compared to 1.1% growth in 2010. However, the
economy, as of now, remains fundamentally solid because of low
unemployment and healthy wage growth. Economy directly effects
banking sector including ANZ. Australian government proposed a bill
to amend the Banking Act of 1959, which planed to allow financial
institutions in Australia to issue covered bonds. Following the
regulatory amendment, it is widely believed that Australia's four
major banks including ANZ could now be able tap the market for an
additional $154 billion. Slide: 18/21
19. Opportunities & Challenges: SWOT Analysis Contd.
Threats: ANZ is likely to face hurdles from Australian Prudential
Regulation Authority (APRA), a prudential regulator of banks; in
implementing its strategy. Politicians have been increasing their
criticism of the banks, particularly over the pricing of mortgages.
Moreover, in February 2012 when ANZ announced decision to push
through an interest rate rise independently of the Reserve Bank,
and revealed plans to cut 1000 staff by September 2012, it received
negative press and warnings from APRA. Slide: 19/21
20. Conclusion Communicating its successes will not only help
generate the recognition its programs deserve, it will also help to
provide valuable lessons for the industry and other financial
sectors around the world. For now, the imperative should be to
continue and extend its existing range of programs and to build
upon the achievements it has made to-date. Stability, commitment,
and a successful track record of addressing an issue over time will
ultimately demonstrate and determine its corporate leadership.
Slide: 20/21