Raw Japan

Slices of Japanese business, politics and life

Asia banks eye gaps on the Western front

By David Dolan
April 6, 2009

Mike Smith, the chief executive of Australia and New Zealand Banking Group Ltd, is looking to fill some gaps.

As global banks such as Royal Bank of Scotland Plc and Citigroup Inc reel from losses on toxic investments and take massive government bailouts, Smith reckons he may be able to steal some business in Asia.

“Citi is still there, but of course everyone is waiting to see what happens,” Smith told a news conference in Hong Kong recently.


“So, yes, there’s a gap in the market and I think we’re the obvious contender to fill it.”

Asian commercial banks such ANZ and Singapore’s DBS Group are angling for the big corporate loans that were once the territory of global, Western banks.

Standard Chartered Plc and HSBC Holdings Plc, London-based but Asia-focused, are among those expected to seize opportunities in corporate lending, trade finance and loan syndication.

“On the commercial banking, plain vanilla stuff, I do think there will be a clear benefit to the domestic players,” said Sunil Garg, Asia bank analyst at JP Morgan in Hong Kong.

“So, if RBS or Citi is less active, for example, in providing loans in the corporate sector or trade finance, then I think some of that business will go to local business players.”

But, as always, Japan has to be the exception.

Tokyo’s sprawling “megabanks” — Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group – initially looked like the winners in Asian lending as they ramped up loans across the region.

But they’ve since been caught by heavy losses on their share portfolios, which has put the squeeze on overseas loan growth, Japanese bankers say.

That too, may be a gap Mike Smith is looking for.

Photo credit: REUTERS/Woody Wu

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