ANZ Walks Away from Deal to Buy HK Bank

Leading bank ANZ has withdrawn from a plan to buy a Hong Kong bank when the parties did not agree on the price. ANZ’s withdrawal also sends the signal that it would focus on organic growth rather than merger and acquisitions.

According to news reports, ANZ has always been keen on purchasing Hong Kong-based banks as part of its strategy to expand its Asian business. Mike Smith, ANZ chief executive, has also said that prices of banks in Asia are considered “attractive.”

A report published in the South China Morning Post, however, asserted that ANZ has withdrawn plans to purchase an unidentified bank. According to sources, the bank is a family-controlled corporation. Some of the most popular ones include Wing Hang Bank, Chong Hing Bank, Bank of East Asia, and Dah Sing Bank.

ANZ, however, did not make any comment on the latest development. Its spokesperson said the bank remains focused on achieving organic growth in China. This includes building a stronger regional platform, retaining its AA credit rating, and managing its capital.

ANZ is said to have invested as much as $300 million in China.

The bank, however, will face new banking rules in the country that would threaten its profitability for its Asian-based ventures.

Basel III is currently being rolled out and would require banks to allocate more investment capitals for partnerships.