Australia and New Zealand Banking Group, or ANZ, has re-entered India after 11 years. On a recent India visit, Alex Thursby, CEO for Asia Pacific, Europe & America, ANZ, spoke to BT's Rajiv Bhuva about the financial chaos in the West and its implication for Asia as well as of ANZ's larger India plans. Edited excerpts of the interview:
On America: It is going to be a long-term fix for America: deleveraging, rebalancing the savings and getting back confidence for investments. The opportunity is the $1.5 to $2 trillion in corporate America's balance sheet. America may recover slowly, but going back to 4.5 per cent growth soon is unlikely.
On Europe: The immediate issue is sovereign deficit. Then, there are issues with bank assets. To cleanse that is a complex process. The first option is to do nothing. The second is to break the euro, but that is unlikely given the political contract that euro has to succeed. The third is restructuring that could be along the lines of the Troubled Assets Relief Program adopted by the US after the subprime crisis.
On the effects in Asia: Open economies like Hong Kong, Singapore, and Korea will get hit pretty hard and go into a decreasing growth. However, those with strong foreign exchange reserves, liquidity in the banking system and capital will be better off. The more closed economies like India, China and Indonesia are more protected.
On India: India is an economic powerhouse. It is key to our efforts to build a 'super regional' bank. Our wish is to have substantial contribution to the overall Asian business. We did not leave India totally; we were dealing with the Indian clientele from offshore. We will cater to corporate and institutional clients before building a franchise to go retail.