ANZ shuts Hong Kong equities trading desk

ANZ, Australia’s third largest bank, has shut its equities trading operation in Hong Kong, and has relocated the function back to Sydney.

Recruitment sources tipped off eFinancialCareers, saying that the team had been laid off in Hong Kong. A spokesman for ANZ said that the bank – which has been on an aggressive expansion track in Asia over the past six years – had “consolidated its trading platforms in Hong Kong and Sydney, into one in Sydney".

Libby Armstrong, head of communications and corporate affairs at ANZ’s international and institutional bank, said the consolidation exercise, which happened in October, was “the result of an operational review of our equities business to improve efficiencies".

Armstrong would not say how many jobs had been affected, saying only it was “a handful”, and some of it had been achieved by natural attrition. She declined to comment on whether any of the bank’s other Asian operations would undergo a similar efficiency review, and whether jobs would be cut.

“This does not reflect a change in strategy, and as a general statement, like most organisations, we continually review our operations to ensure we are running as efficiently and effectively as possible.”

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ANZ’s Asian ‘super regional’ expansion strategy, spearheaded by CEO Mike Smith, has seen the bank make the most assertive moves of the big four Australian banks into Asia-Pacific.

But the strategy has had its detractors, with some analysts pointing to the lower returns it has generated for the bank in comparison to its Australian and New Zealand operations.

JPMorgan said in a note published before ANZ’s recent results, that ANZ’s returns “have lagged across most key metrics including revenue growth despite above-peer exposure to the higher-growth Asian region…”

It said that “a domestic focused approach such as CBA's or Westpac's has proven to be more profitable than ANZ's Asia push".

But ANZ feels its recent results vindicate its decision to move into Asia, with the bank reporting record profits in the year to September, due to “a distinctive long-term strategy focused on growth in our domestic franchises and targeted expansion in Asia,” Smith said.

ANZ is not the only significant bank to be cutting back its equities team in Asia. Sophia Yan, a senior consultant at Bó Lè Associates, said “a bulge bracket bank has just reduced the number of equity analysts in Asia from 180 to 100," but she declined to name the institution.