KEY POINTS:
One of New Zealand's big banks is likely to be in Chinese hands within the next five years, says new ANZ Banking Group chief executive Michael Smith.
Smith, who took the reins at ANZ from John McFarlane this month, was in New Zealand yesterday meeting media and bank
staff.
The former chief executive of Hong Kong Shanghai Banking Corporation says his appointment was a recognition of the ANZ's growing focus on developing its Asian business.
"I'm convinced that Asia is going to be the growth region of this century. It will be the engine that will drive the global economy, particularly China and India. The proximity of New Zealand and Australia to those markets means they are uniquely positioned to benefit from what I think is going to be a very exciting time."
ANZ already has some Asian business, but Smith said it, along with its three large Australian rivals, would inevitably do a lot more.
The Australian banks' growth had been constrained by the size of the domestic markets at home and in New Zealand.
"I think now it's time to be less incremental and look at the quantum growth that is available in the Asian markets."
Smith has a vision of ANZ as a regional bank - "a super regional bank, if possible".
While that presented risks, not least those posed by systemic issues in China's banking sector, Smith said he was confident in ANZ's management capability, and indeed his own.
"Banks like HSBC and Standard & Chartered are incredibly successful - why can ANZ not be as successful? I've run one of those organisations, I now run another.
"I'm not worried by that challenge at all. In fact I'm very excited by it, I'm energised by the prospect.
"I didn't come for this job to lie by the pool."
But the meteoric growth in China's economy that is attracting businesses such as ANZ means the country is building up vast financial muscle itself, and will increasingly look to flex it in this part of the world.
Smith says ANZ has kept an eye on international institutions which might look to acquire a large Australian bank. Up until recently the potential acquirers had been banks such as Citibank, HSBC and ABN Amro.
"But now it's the Chinese banks. They've got huge amounts of capital and strategically it makes sense for them to move here."
That is largely due to the importance of Australia's resources to China's own growth.
"If I was running one of the major Chinese banks, that's what I would be looking at."
He believes such an acquisition is likely within the next five years.
"It's just a question of when, not if."
Australian domination of New Zealand's banking sector means that any purchaser of one of the big Australian banks would acquire a significant bank in New Zealand by default.
