Westpac surprised the market with a $400 million bid for a stake in Hong Kong’s Bank of East Asia in December. Unfortunately for Westpac, it was outbid by a higher offer from one of Japan’s financial giants, Sumitomo Mitsui.
According to the Australian Financial Review (AFR), Westpac was looking for a long-term strategic holding in the business, but this move came as a surprise, as Westpac has traditionally been more domestically focused than the other banks. The majority of its $6.6 billion in profit last year came from Australia and New Zealand.
With domestic growth slow and slowing even further, Australia’s banks have been looking for other alternatives to grow their earnings. With fast-growing economies, a rising middle class and large savings, Asia is proving too attractive for our banks to ignore.
ANZ Bank has been expanding into Asia for a few years now, and has operations in 14 Asian countries, while the Commonwealth Bank (ASX: CBA) operates in seven, National Australia Bank (ASX: NAB) in six and Westpac currently in five countries. ANZ has repeatedly stated that it is aiming to derive between 25-30% of group profits outside of Australia and New Zealand by 2017.
Westpac is due to open a branch in India later this month, joining the other three majors who already have a presence there.
Westpac investors will be hoping that its ‘Asian’ strategy has more success than NAB’s forays into international markets. NAB’s UK expansion has been deemed a disaster and follows on from its dismal US experience, where it was forced to incur write-downs of more than $3 billion in 2001.
In the market for high yielding ASX shares? Get three “Rock-Solid Dividend Stocks” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm