ANZ Benefits from Australian Guarantee in Pacific Banking

ANZ bank has reached an agreement with the Australian government to ensure banking services in the Pacific region remain available.

Australia has been collaborating with commercial banks to prevent the withdrawal of financial services from Pacific island nations, which are not financially viable.

Concerns have been raised that a potential void could be filled by Chinese state-affiliated banks, leading to dependency on China. China expert Ben Herscovitch pointed out that this could make nations susceptible to pressure or influence from Beijing.

Under the deal, Australia will offer a $2 billion (US$1.2 billion) guarantee to ANZ’s Pacific operations over a period of 10 years, accompanied by an annual payment from the bank to the federal government. The agreement is scheduled to commence in the latter half of 2025.

Additionally, the bank will inject an extra $50 million (US$31.5 million) into its Pacific banking systems to improve digital services and sustain its fee-free service for international money transfers to the region throughout the guarantee period.

ANZ operates in eight Pacific countries and East Timor.

ANZ CEO Shayne Elliott stated on March 14, “Despite the challenges of operating in the Pacific region, we are dedicated to promoting economic development, essential infrastructure, and payment networks across the area. We are committed to facilitating Pacific customers’ access to trade and investment possibilities.”

The bank has a workforce of 1200 individuals across the region and has invested $95 million (US$59.9 million) in infrastructure, systems, and technology over the last five years.

In a separate agreement, Australia has guaranteed banking services for Nauru, giving it the authority to prevent the nation from entering other security arrangements. Commonwealth Bank will take over banking services in Nauru from 2025 following Bendigo Bank’s withdrawal.

This move aligns with Australia’s efforts to limit Chinese influence in the Pacific as China seeks to expand its presence through security and policing agreements with certain nations.