Canada and Australia have a similar colonial heritage, a resources based economy, and a few large dominate banks which demonstrated strong stability and financial prudence before and during the global financial crisis. The distance from the Sydney/Melbourne business centres to Singapore are roughly similar to the distance between Vancouver and Tokyo so the regular contention that Australia is more connected to Asia need not be as strong as Canadians like to make it out to be. It is more a provincial mindset as Canadian politicians and business executives view the Pacific Ocean as a barrier rather than a gateway, while over the past decade Australia has made Asia a stronger strategic priority.
The oligopoly that banks enjoy in both Canada and Australia has resulted in them being slow to develop a competitively relevant presence in Asia. However, is ANZ Bank now putting Canadian Banks to shame? While none of the Canadian banks have any member of its corporate management team with substantive working experience across Asia, ANZ Bank has 6 of its 12 executives with deep Asian experience. Only 3 of ANZ’s 12 corporate executives have work experience confined only to Australia/New Zealand. No wonder, media stories about ANZ Bank in Asia, which appear almost every day, have become mundane news, while stories about Canadian banks in Asia are treated as a media event.
ANZ Bank launched its Asia strategy in 2007 and during 2011 generated 20 percent profit growth from Asia representing 15 percent of ANZ Bank’s overall earnings. As Bank of Montreal, Scotiabank, and Royal Bank of Canada only dabble in Asia (TD Bank and CIBC are for all intents and purposes, competitively non-existant), their Asia revenue and profits have not even been material for annual reporting purposes.
Will the lack of Asia experience on the board of directors and the corporate management teams coupled with Canadian conservatism and comfort in staying close to home, undermine Canada’s competitive relevance in Asia even as Asia becomes the economic driver of global growth? Read “What the Analysts Are Saying” by linking to the website or downloading the PDF.