SYDNEY, Sept 28 (Reuters) Michael Smith, incoming Chief Executive of Australia and New Zealand Banking Group Ltd , left no doubt on Friday that the bank will target Asia for future growth, but cautioned it would not be easy.
Smith, in his first media conference before formally taking charge as ANZ's CEO on October 1, said Australia and New Zealand were mature and relatively small markets, making it important for the bank to look to its neighbours. ''We will be looking more at Asia,'' Smith said. ''But deals in Asia are extremely difficult to execute, the legal systems and the regulatory environments of these countries vary enormously. But I do believe that is where there will be opportunities.'' Smith, 50, replaces John MacFarlane, who served as ANZ's CEO for a decade and steered ANZ's return to Asia.
A career HSBC executive with a longtime focus on emerging markets, Smith is expected to further build on ANZ's lead among Australian banks in their push into Asia.
ANZ, Australia's third-biggest bank with a market value of A$55.41 billion ($49 billion), has so far invested A$1.7 billion in buying mostly minority stakes in banks from Indonesia to China to achieve its Asian aspirations.
While that represents about 8.1 percent of its total equity base, ANZ has flagged it could invest up to 20 percent of the equity, or a total A$4.2 billion, in its Asia expansion by 2012.
And by then, ANZ expects its Asian bank investments to contribute between A$300-A$400 million to the group's profits, the bank said in its latest result presentation.
But Smith highlighted risks in Asia.
''The key risk in operating in Asia is to ensure that you have the depth of management that is used to those markets.
Markets like China are not easy,'' he said.
In the domestic market, Smith said he saw potential to grow the group's wealth management business, where ANZ lagged the other three big Australian banks.
''In wealth management we are punching below our weight,'' he said, adding he would prefer to grow the business organically before looking at acquisition opportunities.
When asked if ANZ was interested in buying struggling mortgage lender RAMS Home Loans Group Ltd , Smith said: ''We always look at opportunities, but that is not high on the agenda. But you can never say never.'' ANZ shares were trading up 1 percent at A$29.71 in a firmer overall market. ($1=A$1.14) REUTERS PBB KN1547