MUMBAI, January 28: ANZ Grindlays Bank will not be affected by the South-east Asian crisis and the collapse of Asian companies, said John McFarlane, who has recently been elected as the chief executive officer of the ANZ Banking group.
Speaking to The Indian Express during his visit to Mumbai, the new CEO said ANZ Grindlays has only negligible exposure in the region. ``Most part of our lending in the South East Asian region is to corporate clients and in Japan to leading banks and financial institutions which are not affected by the crisis,'' he said.
While the operations of the bank are spread across 43 countries, there is a concentration of business in South and East Asia and Middle East. According to the group balance sheet, 72 per cent of the income during 1997 (ending September 1997) came from Australia and New Zealand. However, the Asia Pacific region accounted for seven per cent of the total income after the UK and European market.
``Our total asset base is Australian $ 138 billion andeven if you take the entire crisis ridden region, our exposure is negligible,'' said McFarlane. ``Japanese banks and institutions to which we have exposure are still strong. The bad debt problem is there for all the banks,'' he said.
The cross border outstandings of the ANZ group to countries which individually represented in excess of 0.75 per cent of the group's total assets to Japanese government and official bodies, banks and financial institutions and other corporate outstandings amount to AD 2,129 mn. This is the third largest outstanding after New Zealand and the USA. Similarly South Korean government bodies, banks & FIs and corporate borrowing of AD 1,534 mn. While Indonesia has only 1,103 mn outstanding more than French corporates borrowings, banks and institutions, ANZ Bank's oustanding from India is only A $ 1192 million.
Out of top ten geographical areas in which the ANZ group has major presence, five are Japan, Singapore, Hong Kong, South Korea, Indonesia and India. ``While we are concernedabout the Asian crisis, we have been managing our credit and exposure risk properly. Most of our exposure is to Japanese banks,'' he said.
The ANZ group is taking the crisis as an opportunity to expand the business in the region. ``We are planning to have more joint ventures, equity partnership with local banks,'' he said.
ANZ Bank has been been operating in India since 1854. ``There are fluctuations in any economy. We have been operating in India for several years,'' he said. ``ANZ wishes to expand its operations in India.,'' he said.
``The principal reasons for the South-east Asian crisis were reverse flow of hot money out of currency and stock markets triggered off by anticipated surge in demand for dollars and weak and fragmented banking sector infected by high levels of non-performing assets, especially in property,'' he said.However, he ruled out any such possibility in India. ``The macro indicators are strong. India's current account deficit is at a manageable level of 1.2 per cent of GDP. Alsothe currency is not fully convertible, actively managed and hence not susceptible to the same level of volatile capital flows,'' he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.