The financial sphere is all agog with the Asian growth miracle. But, looking deeper, the Asian rags-to-riches story should not convince a foreign bank to immediately put up tent in Asia.
As news reports and analysts predict, Asia is about to be the next big market. Currently, China’s GDP is already something to contend with.
However, there are risks that must be considered before deciding on whether to establish another ANZ bank in the region. The risks include cultural hurdles and stiffer regulations.
Firstly, the credit attitude in Asia is different from the rest of the world. Asians do not believe in loans and mortgages. This concept which stimulates consumer spending has been historically shunned by the Chinese. In fact, the largest issuer of mortgages in China has only 20% of such kind of credit in its loan.
The current crisis is may also bring the toughening of financial regulations in Asia. Despite consistent lobbying in the financial sector, no foreign bank has the right to underwrite nor distribute securities on its own.
Despite the risks, a foreign bank can still be profitable in Asia. The wealth that Asia can generate is enormous. Goldman Sachs projects that the number of individuals in China with annual incomes of over $3,000 will increase by ten times between 2005 and 2015. 
Recent studies by Clark and Sanches (2001) also suggest that subsidiaries of foreign banks are able to provide a wider range of financial services. ANZ, as compared with The Commonwealth Bank who owns stakes in Chinese banks, plans to put up a subsidiary in China. It intends to establish a rural bank.
As of the moment, Asians in general are credit card averse. But, the mentality could be shifter buy aggressive marketing.
Finally, given the increase in the wealth of China, Vietnam, Thailand and Asia in general, foreign banks like ANZ can focus on niche markets. Since credits are highly controversial due to the US financial fiasco, it would be prudent to take one step at a time. ANZ should target consumer banking first. The increased monetary capacity will necessitate a bank that would attend to customer savings.
Afterwards, it could foray into wealth management. In doing so, ANZ must capture the nouveu rich first. Afterwards, it could try investment banking. Perhaps a in a decade then, income generation from loans could take off.
ANZ is doing the right move. It should start building in Asia, to be able to capture the market, once regional attitudes on money starts to shift.
Montgomery, H.,The Role of Foreign Banks in Post-Crisis Asia: The Importance of Method
of Entry, Asian Development Bank, 2003
Clarke, G., R, Cull, M. S. M. Peria, and S. M. Sanches “Foreign Bank Entry:
Experience, Implications for Developing Countries, and Agenda for Further Research,” mimeo, World Bank,2001
Plunkett, J. W. “China’s Banking Market Loomed Large But May Slow in a Tight Economy”
[Electronic version]. Banking, Mortgages ; Credit Industry, Retrieved 20 May 2009 from ;http://www.plunkettresearchonline.com.;
“Needed: A Strategy Banking in China”, The Economist, 3 January 2009
John, Danny. ANZ Set for Approval of China Bank Launch , Retrieved 19 May 2009,
,3 Plunkett, J. W. “China’s Banking Market Loomed Large But May Slow in a Tight Economy”
 Needed: A Strategy Banking in China
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