Strong network powers BNZ's China push

Anthony Healy. Photo / Supplied

Bank of New Zealand has bypassed the usual Australasian route to banking in China. Instead of building a large operation with branch networks and taking equity in local banks, BNZ is supporting the investment and trade needs of New Zealand exporters aiming to expand their Chinese operations.

It's a different strategy and one that plays to the bank's strengths. BNZ corporate and business executive director Anthony Healy says its dealings in China are mainly through its Australian parent, the National Australia Bank (NAB), a link giving BNZ two advantages.

First, Healy says, NAB is Australia's leading commercial business bank. He says it is more focused on trade flows than its rivals. Leveraging this expertise is powerful for New Zealand organisations wanting to export into growing Asian markets like China.

Second, NAB was the first Australasian bank to enter China. Healy says NAB has had operations in the country for 40 years - that's as long as Western nations have enjoyed diplomatic relations with the country and long predates China's flowering as a trade superpower.

Healy says BNZ customers get the benefit of hard lessons learned during NAB's 40 years of experience in China. And the length of time has also given NAB an opportunity to create a strong partnership network through the country. Healy talks in terms of deep connections formed by a team on the ground made up of local specialists alongside experts in matters such as understanding the, at times, opaque regulatory environment. What can look complicated and difficult to people outside China is often not a big deal for people who live there.

Overall, the BNZ China strategy is about deepening ties, not creating a large footprint - that's a strategy Healy says will deliver growth for his New Zealand clients, especially those in the sectors most relevant to China: food and agriculture. "We focus on facilitating our client's trade and investment flows."

As part of this strategy the bank recently appointed former NZ Trade and Enterprise director Paul Gestro as head of its Asia Desk.

Gestro brings experience at helping New Zealand businesses move into Asia and is responsible for finding potential partnerships to extend the reach of BNZ's exporting customers. "My role is about connecting into networks, understanding growth strategy and understanding customer requirements in the market then matching this with the right advice. Once that happens, companies will grow naturally. We'll then support that with our banking products."

Gestro says BNZ is taking a long-term view. "Instead of looking at the customer needs now, let's look at their needs in 10 or 20 years' time and carry them through the journey". And it isn't just about China. He says it's not unusual for a New Zealand company to form a relationship with a Chinese partner that takes them elsewhere in Asia.

One advantage of the 40-year insider view of business in China is that it adds perspective. For much of that time there was relatively little trade between New Zealand and China, Gestro says things took off when the two countries signed a free trade agreement in 2008.

There was more to the free trade deal than a simple increase in business between New Zealand and China: "There's now an awareness about exporting to China." However he says at the same time there are misconceptions about dealing with the country. Gestro often hears talk that exporting to China is too hard. He disagrees. "It can be as easy as exporting to Australia."

Many exporters are put off by the scale of dealing with China. Gestro says that's where BNZ comes into the picture, answering questions such as, "how do companies work with their bank to achieve the necessary scale?".

"It takes a long time to build scale in China," says Healy. "Scale is about getting knowledge and competitive advantage.

"Customers can plug into our network both in China and back here in our partner centres. This gives them a place to do business with quality meeting facilities, video conferencing and so on."

This is important for the food and agricultural sector, particularly for those in provincial New Zealand less inclined to invest in front of house facilities. Healy says this allows them to show their Chinese clients a professional face.