ANZ China’s outlook stable amidst strategic position

It is expected to maintain its capital buffer over the next two years.

Australia and New Zealand Bank China (ANZ China) maintains a stable outlook given its strategic importance to its parent bank.

ANZ Group has indentified China as a key growth market. This means that ANZ China is likely to enjoy “timely and strong support” from its parent company under almost all foreseeable circumstances, S&P Global Ratings said in a report.

“We believe ANZ China will remain an integral part of ANZ group's regional strategy,” the ratings agency said in its latest ratings report on the bank, where it affirmed its A+ long-term and A-1 short-term issuer credit ratings.

S&P said that it is unlikely that ANZ China will be sold, and that ANZ China should be able to maintain its capital buffer in the next two years. 

ANZ China will also have no need for any capital injections from its parent over the next two years, given its controlled risk appetite and already healthy level of capitalization.

However, the extent of extraordinary group support to ANZ China could be somewhat weaker than that for other rated subsidiaries that we consider core to the group, such as ANZ Bank New Zealand, S&P said. 

This is because ANZ China remains a small subsidiary of its parent, at just 2% of the group’s total equity and less than 1% of its total assets as of end-2023.