Growing International Services, Trade and Investment

1. Growing International Services, Trade and Investment Wayne Stevenson Group General Manager Strategy, ANZ

2. ANZ in Asia Pacific • ANZ has a long-standing substantial presence in the region • Our network puts us among the top 5 banks in Asia • Our Super-Regional strategy is based around priority markets and an expanded presence: • Top 4 bank in Indonesia • Largest foreign bank franchise in the Greater Mekong • Some of Australia’s largest investments in Greater China, Indonesia, Malaysia, Vietnam • Leading bank in the Pacific

3. Several key changes are occurring • Pre Global Financial Crisis • Post Global Financial Crisis • High growth • Unsustainable credit growth • De-regulation • Plentiful inexpensive capital • Centre of economic gravity – Developed economies • Multi speed growth • Deleveraging, lower credit growth • Re-regulation • Capital and funding scarcer, more expensive • Economic power shift – Developing economies

4. Australia’s economic and trade engagement with Asia – the opportunity • Australia’s economic and strategic interests are tied to Asia Pacific • It is in our interests to ensure we are part of the evolving economic architecture • Asia’s economies are stronger and better placed to become even more important to Australia’s future • Trade between Australia, New Zealand and Asia has doubled over the past five years to $300 billion and intra Asia trade is now over $4 trillion • Australia is increasingly seen as a safe and attractive place to invest with over $60 billion in direct foreign investment

5. Australia’s economic and trade engagement with Asia – the opportunity (ctd) • Our customers are increasingly focused on Asia – 50% of our domestic Corporate and Institutional clients depend on Asia for more than 25% of their business and over 80% have some connection with the region • Urbanisation will increase demand for services and accelerate transformation from manufacturing to services led economies • Business services exports from India and China have grown by 10% each year for the last decade • Over $13 trillion will be spent on infrastructure across Asia over the next 10 years

6. Addressing Barriers in Financial Services • While opportunities exist there are barriers which restrict expansion: • Equity limits on investments in local banks • Single presence policies • Two Bank rule • Transparency disciplines • Limits on numbers of branches and ATMs • Restrictions on entry of temporary staff

7. Conclusion • For an advanced, predominantly services based economy such as Australia, delivering outcomes on services as part of Australia’s trade negotiations is crucial • Potential to significantly expand and diversify Australia’s export base • We need agreements which ensure foreign service providers are treated no less favourably than their local counterparts • To make the most of this opportunity we need to • Foster industries which are regionally relevant and competitive • Be innovative and look for new ways of doing business and thinking about our relationship with Asia