Morgan BellANZ Goes Malaysia
December 1st 2006 13:41
If you, dear reader, like banks and owned one where would you go today for business? ANZ is going Malaysia and growing in the process. Stay with me for more.
The news today, 1 December 2006, is that “ANZ will pay $833 million to become the largest shareholder in Malaysian bank AMMB Holdings, with a 24.9 per cent share, in a deal designed to exploit the economic potential of a country growing at twice the rate of Australia.”
“ANZ yesterday announced heads of agreement to pay Amcorp $454 million for 11.4 per cent of AMMB, Malaysia’s fifth-largest financial institution with total assets of $US19.9 billion ($25.27 billion) and more than 2.5 million retail customers.”
“The Kuala Lumpur signing ceremony was attended by Prime Minister John Howard, who was a guest at an Australia Malaysia Business Council lunch at the same venue.”
“ANZ’s total outlay of $833 million means the nation’s third-biggest bank has now spent more than $1.6 billion building a portfolio of retail partnerships in Asia, including 20 per cent shareholdings in two banks in China.”
“ANZ is the most aggressive investor in Asia among Australia’s top four lenders.”
“Chief executive John McFarlane said the aim was to “supplement a strong local franchise” with ANZ’s capability to accelerate growth.”
This news was published in the online version of The Australian under the title “ANZ to take 25pc stake in AMMB” and was written by Richard Gluyas. Click here to open that page: theaustralian.news.com.au.
ANZ (ASX: ANZ) has a long tradition of investing in Asia. In 1996 it was the only of the four big banks (NAB, CBA, WBC and ANZ) to get adverse effects from the currency induced recession which affected Asia and specifically Malaysia. But, as it seems now more than ever before, Asia is where it should be going.
The problem for the four big banks is, since they are already so large and mergers between them are not allowed by law, where to expand to next. I would say that it’s where the growth is, and today the growth is in Asia.
Our big four banks have expertise and capabilities which can synergise with and complement Asian banks allowing them to grow and, in the process, increase our big four’s income and asset base.
And, in fact, they have been quietly and methodically investing in Asia, especially in China and India.
ANZ’s share price is $28.12.
It managed to increase its earnings in the past six years by 11 per cent compounded to 188.6 cents. ANZ paid a dividend of 125.0 cents to yield 4.45 per cent.
Its current Net Profit is $3661 million. Net Interest Margin is 2.4 per cent and its Cost to Income Ratio, the administrative expenses ratio, is 45.9 per cent, which is not bad.
Also, 92.4 per cent of its assets earn interest. ANZ’s Return on Assets is 1.1, which is good, and Return on Equity is 18.7, which is very good.
Its P/E, though, being 15 times seems to indicate that ANZ at this stage is fully priced.
These figures are based on data available at: http://money.ninemsn.com.au/shares-and-funds/research-a-company/.
When I think of the potential of Asian financial markets, including the population base that they represent with its increasing wealth, I also think that the sky is the limit. We’ll see.
End
The news today, 1 December 2006, is that “ANZ will pay $833 million to become the largest shareholder in Malaysian bank AMMB Holdings, with a 24.9 per cent share, in a deal designed to exploit the economic potential of a country growing at twice the rate of Australia.”
“ANZ yesterday announced heads of agreement to pay Amcorp $454 million for 11.4 per cent of AMMB, Malaysia’s fifth-largest financial institution with total assets of $US19.9 billion ($25.27 billion) and more than 2.5 million retail customers.”
“The Kuala Lumpur signing ceremony was attended by Prime Minister John Howard, who was a guest at an Australia Malaysia Business Council lunch at the same venue.”
“ANZ’s total outlay of $833 million means the nation’s third-biggest bank has now spent more than $1.6 billion building a portfolio of retail partnerships in Asia, including 20 per cent shareholdings in two banks in China.”
“ANZ is the most aggressive investor in Asia among Australia’s top four lenders.”
“Chief executive John McFarlane said the aim was to “supplement a strong local franchise” with ANZ’s capability to accelerate growth.”
This news was published in the online version of The Australian under the title “ANZ to take 25pc stake in AMMB” and was written by Richard Gluyas. Click here to open that page: theaustralian.news.com.au.
ANZ (ASX: ANZ) has a long tradition of investing in Asia. In 1996 it was the only of the four big banks (NAB, CBA, WBC and ANZ) to get adverse effects from the currency induced recession which affected Asia and specifically Malaysia. But, as it seems now more than ever before, Asia is where it should be going.
The problem for the four big banks is, since they are already so large and mergers between them are not allowed by law, where to expand to next. I would say that it’s where the growth is, and today the growth is in Asia.
Our big four banks have expertise and capabilities which can synergise with and complement Asian banks allowing them to grow and, in the process, increase our big four’s income and asset base.
And, in fact, they have been quietly and methodically investing in Asia, especially in China and India.
ANZ’s share price is $28.12.
It managed to increase its earnings in the past six years by 11 per cent compounded to 188.6 cents. ANZ paid a dividend of 125.0 cents to yield 4.45 per cent.
Its current Net Profit is $3661 million. Net Interest Margin is 2.4 per cent and its Cost to Income Ratio, the administrative expenses ratio, is 45.9 per cent, which is not bad.
Also, 92.4 per cent of its assets earn interest. ANZ’s Return on Assets is 1.1, which is good, and Return on Equity is 18.7, which is very good.
Its P/E, though, being 15 times seems to indicate that ANZ at this stage is fully priced.
These figures are based on data available at: http://money.ninemsn.com.au/shares-and-funds/research-a-company/.
When I think of the potential of Asian financial markets, including the population base that they represent with its increasing wealth, I also think that the sky is the limit. We’ll see.
End
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Comment by Ashish
IT Business Analysis