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AANZFTA Business Seminar – Services Trade with SE Asia

AANZFTA Business Seminar – Services Trade with SE Asia. Financial Services Workshop. Prepared by : David Bell Date : 3 June 2011. Agenda or Contents. The Role of Banks. We support the “partners in growth” philosophy Banks have a vital role in linking Trade

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AANZFTA Business Seminar – Services Trade with SE Asia

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  1. AANZFTA Business Seminar – Services Trade with SE Asia Financial Services Workshop Prepared by : David Bell Date : 3 June 2011

  2. Agenda or Contents

  3. The Role of Banks • We support the “partners in growth” philosophy • Banks have a vital role in linking Trade • Our parent (CBA) has invested resource in the markets of Indonesia, Singapore and Vietnam to date – further expansion is planned • Strategic intent to support New Zealand and Australian businesses in our key trading regions, such as South East Asia. • Other banks have adopted the same approach • International banks (i.e. HSBC) have strong global interest but may lack the same level of desire to support NZ’s SME’s

  4. Current Opportunities • Education – private ownership or consultancy partnering • Infrastructure • Aviation – pilot training & refurbishment • Agritech- on farm

  5. Market Conditions • Full range of financial services is available – i.e. Debt, Trade, Retail, etc • Mix of personal and electronic service platforms (branch & internet) • However, banking licenses are regulated and “home banks” such as ANZ, ASB, BNZ, WBC, have limited offerings in certain jurisdictions. • Key to success is a strong in-market partner bank with mutual growth objectives • ASB maintains personal relationships with key executives to ensure continuity of world class service outside NZ • ASB has partnerships with global (Standard Chartered), regional (DBS) and many local banks throughout the ASEAN countries.

  6. Value of an Agent or J.V. Partner • Can take care of all the Laws & Ethics issues for a margin • Selling & promoting – sales force • Bulk Breaking – large lots into small • Warehousing – hold & manage inventories • Transportation- quicker delivery to buyers • Financing – end user • Risk Bearing – title, cost, theft, damage, obsolescence • Market info – competitors, new prod’s, price points

  7. Risks of International Trade • Product risk – pricing, packaging, transport, insurance • Market risks - exchange and interest rates, shipping rates and prices • Credit risk of the overseas supplier or buyer • Legal risks - legislation and policies of other countries • Settlement risks - overseas banks & financial regulations • Political and country risks in dealing with overseas countries • Operational risk • Middleman risk • Cultural • Fraud

  8. Practical Help from a Bank • ASB supported Rakon, an Auckland based exporter of oscillating crystals, with their in market J.V. Payments & Transactions • ASB provided in market transactional account (local and USD ) to facilitate running of local sales office Trade Finance • ASB provided USD 20m Standby L/c to “in-market’ local bank • “in-market” bank issued Commercial L/C’s to Japanese suppliers • Rakon installed plant & equipment at new factory • Offshore manufacturing began

  9. Sales are vital, but getting paid is paramount - engage your banker early Carefully assess each country – as entire region is not the same J.V. partner maybe required to sift through/comply with local rules There is huge opportunity with the appropriate preparation and planning around risk mitigation It is getting easier Key Takeouts

  10. Contacts David Bell GM Transaction Banking Solutions ASB Institutional P : +64 9 337 4945 M : +64 21 491 240 E : david.bell@asb.co.nz Level 21, ASB Bank Centre 135 Albert Street, Auckland 1140 Mike Atkins Head of International Trade ASB Institutional P : +64 9 337 4830 M : +64 027 475 8889 E : mike.atkins@asb.co.nz Level 21, ASB Bank Centre 135 Albert Street, Auckland 1140

  11. Disclaimer This document is a private communication and is not intended for public circulation or for the use of any third party, without the approval of ASB. The information contained in this document is given with an express disclaimer of responsibility. No right of action shall arise against ASB or its employees either directly or indirectly as a result of this information. Those acting upon this information do so entirely at their own risk. This information does not purport to make any recommendation upon which you may reasonably rely without taking further and more specific advice.

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