Australia and New Zealand Banking Group (ANZ) is shrinking its Asian trade finance business.

Despite its decision, ANZ is expected to grow other corporate banking operations.

Tough decisions

“We’ve taken some hard decisions around the trade business in particular, which is a really competitive business in Asia,” incoming ANZ CEO, Shayne Elliott, told journalists on a media conference call.

While ANZ reported a one per cent profits increase in the six months ending 30 September, this is the shallowest rise in profitability for the bank since 2008.

Net loans and global banking operations declined by one per cent in the period, marking the first decline for these segments since ANZ began reporting these data in 2012.

Capital redeployment

ANZ’s trade finance operations in Asia reported weaker profits and rising competition, especially in China, which resulted in the decision to scale down these operations.

“From time to time, it’s a great business, and when we have excess liquidity, we can participate,” Elliott said.

“In the second half, the returns were a little too low, and we’ve deployed our capital elsewhere,” he added.

Profits growth strategy

Despite its decision to shrink its trade finance services, ANZ will reportedly expand other corporate banking operations, such as cash management and treasury management.

Elliott’s prime strategy driver is reportedly to double the profitability of ANZ by 2017.