ANZ banking to reopen its operations in India

Ten years after selling off its business in India, Middle East and other parts of South Asia, Australia and New Zealand (ANZ) Banking
Group received an in-principle approval from RBI to open a branch in India. To start with, Australia’s largest lender plans to kick off corporate banking to the top-tier corporates and financial institutions, which will be followed by retail banking for the higher end of the market.

StanChart had taken over ANZ operations in the Middle-East and South Asia and the associated private banking business of Grindlays for $1.34 billion in 2000. This amount also included a goodwill amount of $700 million. Incidentally, when the operations were sold, ANZ Grindlays had 29 branches in 15 cities in India while StanChart had 19 branches in eight cities.

During the time of the takeover, StanChart had 57 branches in nine countries while Grindlays had a larger branch network with 116 branches in 13 countries.

Incidentally, the bank’s in-principle approval for a branch has come with some riders from RBI. The bank’s application for a branch in India had been pending for the past couple of years.

RBI has not been happy with the situation where foreign banks move in and out of India. Sources said to avoid a “revolving door” situation, firmer commitments have been sought from foreign banks seeking a licence for India. A few years ago, Dresdner Bank, which closed operations in the start of the decade, re-entered the country in 2008.

However, soon the bank was taken over by Commerzbank which decided to return the Indian banking licence in 2009. The ANZ spokeswoman did not comment on the riders but said the bank was in the country for the ‘long haul’.

An ANZ spokeswoman said: “We regard India as one of two economies, along with China, that will drive not only Asia, but the world economy this century. Initially, under our foreign bank licence, we will provide banking services to high-end corporate customers and financial institutions, but over time, as we grow our branch network, we will start to build a retail and wealth proposition for affluent customers in key cities. As a result of ANZ’s connection with Grindlays, ANZ retains very strong brand recognition in India, which provides a good base for rebuilding our business in this important market.”

ANZ started to refocus on Asia after Mike Smith who was earlier heading the Asian operations of HSBC took over as the CEO of the Australian bank in 2007. In fact, the bank was also earlier in the race to take over the retail and commercial banking operations of ABN in India.

Incidentally, the bank will not be able to use its erstwhile Grindlays brand which is now owned by StanChart in India. Some of the older Grindlays branches like the 41 Chowringhee Street branch in Kolkata which has been taken over by StanChart are still referred to as the Grindlays branch.

ANZ currently operates a small advisory team in Mumbai, which helps connect Indian corporate clients with other markets in its network in Asia-Pacific, Australia, New Zealand, Europe, America and the Middle East.

It also has a technology and operations centre in Bangalore with a staff of around 4,500. This supports ANZ’s business in Australia, New Zealand and Asia. Subhas DeGamia, who currently heads the advisory business, will head the banking operations too.