Speaking at the 45th Annual General Meeting in Brisbane, ANZ (ASX: ANZ) CEO Mike Smith and outgoing chairman John Morschel spruiked the bank's Asian strategy and gave us a look at what to expect in 2014.
In coming months, former ANZ director and renowned business leader David Gonski AC will take over from Mr Morschel as chairman and continue to push ahead with the bank's ambitious Asian strategy.
Since launching its 'Super Regional Strategy' in 2007, senior leaders at the bank have been criticised by some who believe domestic growth is where the bank should focus. 2013 has been no different and both Mr Morschel and Mr Smith threw out some realistic facts to allay any shareholder concerns. "The 21 economies of Asia now account for 54 per cent of global GDP," Mr Morschel said. "ANZ is the only Australian bank with a meaningful presence in Asia and the only Australian bank with a strategy to benefit from its growth."
Mr Morschel reinforced the group strategy which has three priorities: growing in the Australian and New Zealand market, growing profitably in Asia through trade and building businesses on common platforms therefore reducing costs. He said expectations of a grinding halt to the Chinese economy were overdone and noted the uneven but positive trend of the global economy moving forward. ANZ expects Chinese growth of 7.5% in 2013 and 7% in 2014.
Strong Asian growth will be essential for both the Australian economy and the bank moving forward. Mr Smith pointed out that trade flows to and from Asia are now truly intertwined with the Australian economy, from international students and tourists to big corporate clients and farmers. "Our customers' growing business and personal connections with Asia are actually integrated into every part of our business."
He believes the bank is now "firing on all cylinders" and pointed to its outperformance not only in Asia but throughout the domestic markets of Australia and New Zealand. In the Australian market: "We've had above system growth in mortgages for the past 15 consecutive quarters; and in commercial lending, for the past 7 consecutive quarters." In 2013 New Zealand profit was up 29% (in NZD).
Foolish takeaway
ANZ's move into Asia was a crucial step to differentiating itself from its domestic peers including the Commonwealth Bank (ASX: CBA), NAB (ASX: NAB) and Westpac (ASX: WBC). Diversified revenues and a growing number of customers and lending markets will make it difficult for ANZ not to outperform its domestically focused rivals in the future.
If the stock price falls I will be looking to add ANZ to my portfolio, because I believe it is a great long-term dividend and growth story.
