With regulatory approval finally received for ANZ’s sale of its retail banking assets in Papua New Guinea, ANZ PNG’s Chief Executive Officer Mark Baker talks to Business Advantage PNG about the bank’s future plans in the country.

ANZ’s Mark Baker Credit: BAI

Papua New Guinea’s Independent Consumer and Competition Commission has now given approval to the sale of ANZ’s retail and commercial/SME banking business in PNG to Kina Securities. The value of the transaction, first announced in June 2018, is K24.2 million (AUD$10.08 million).

The sale gives Kina an additional 15 retail branch premises, 72 ATMs and over 1,800 EFTPOS terminals, increasing its lending market share from 5.8% to 8.8% and doubling its deposit market share to 9.9%.

The sale is expected to complete by late September 2019.

Regional strategy

Baker is quick to emphasise that the sale is not unique to PNG. He says ANZ has also divested its retail operations in Asia over the last two years.

‘It’s part of a wider group strategy for the organisation, which is to simplify parts of the bank’s operations outside our two home markets, Australia and New Zealand,’ he tells Business Advantage PNG.

‘He estimates about 80 per cent of the ANZ PNG business is corporate and institutional.’

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‘Our real strength offshore lies in the institutional sector, particularly around connecting customers across the 34 countries in the group. And that’s really our point of difference.

He estimates about 80 per cent of the ANZ PNG business is corporate and institutional.

‘We don’t need or want to be the biggest bank in PNG. We just want to be really focused on what we know we’re really good at and do it really well.’

At the same time as the ANZ was divesting its retail and SME assets elsewhere, he says, Kina Bank was making it clear it was looking to grow in the retail and SME sector.

New branches

Kina now has an additional 72 ATMs. Credit: Kina

The sale does not represent a retreat from the PNG market for ANZ. Indeed, Baker says ANZ will be establishing three new corporate-only branches in Port Moresby, Lae and Goroka.

‘They’ll be brand new sites to service our remaining corporates for their needs in those locations.

‘Elsewhere, through an arrangement with Kina, ANZ corporate customers will be able to go into what was their ANZ branch, but will be a Kina-badged bank, and transact into their ANZ corporate account.’

‘The sale gives Kina an additional 15 retail branch premises, 72 ATMs and over 1,800 EFTPOS terminals, increasing its lending market share from 5.8% to 8.8% and doubling its deposit market share to 9.9%.’

Baker says 320 ANZ retail, SME, commercial and support staff are moving across to Kina, leaving ANZ with about 150 employees in PNG.

He says ANZ’s retail, SME and commercial staff are looking forward to joining Kina ‘because they understand they’re going to a bank which really wants to grow in those segments and that Kina value the experience and values they bring with them.’