Australia’s recent tensions with China led more companies to consider diversifying to other parts of Asia – rather than just focusing on the East Asian country alone, said the CEO of Australia and New Zealand Banking Group, Shayne Elliott.
ANZ — one of Australia’s largest banks — has been talking to companies in Australia and New Zealand about opportunities in Asia as they are interested in that region, he told CNBC’s Will Koulouris on Thursday.
“One of our messages has been: Asia isn’t just China. There’s a big difference between the opportunities in Japan, or Korea, or Singapore, or the Philippines or India, and we wanted to introduce people to those,” Elliott said.
Tensions between China and Australia intensified in recent months, after Canberra called for a global investigation into the origins of the coronavirus. The move angered Beijing, which imposed trade curbs on Australian imports.
Elliott said the recent developments have opened up people’s minds to think more about their strategy in Asia.
“There has been some good about the recent issues. Geopolitically, it’s opening people’s minds to be a bit more thoughtful about a diversified strategy in Asia, rather than just you know, picking one place to do business,” he told CNBC.
When will earnings get back to normal?
The CEO was speaking to CNBC after the release of the bank’s full-year results, which reported full-year cash profit fell 42% to 3.76 billion Australian dollars. That was better than an estimate of 3.51 billion Australian dollars, according to a Reuters poll.
Banks have been under pressure as the Australian economy undergoes its first recession in 30 years amid the coronavirus pandemic, and interest rates are at a record low.
When asked when earnings will get back on track, Elliot said that the banking industry faces a crisis “of some sort, quite regularly” every 7 to 10 years.
“What they really mean is that you suddenly have this shock to the system and our customers, whether they’re mums and dads, small business, big business, suddenly have all these new needs they didn’t have before … It’s actually a time full of opportunity,” he said.
He added: “So I don’t know that there’s going back to normal, I don’t know that ANZ will ever look the way that it used to.”
What it will look like instead, Elliott said, will be a focus on more digital, data-driven initiatives, and sustainable finance.
“That’s what we’ve got to really lean into — an invest to satisfy those customer needs, which are going to be really, really different,” he said.