ANZ and OCBC to create pan-Asian Internet bank

ANZ and OCBC to create pan-Asian Internet bank

Australia and New Zealand Banking Group Limited (ANZ) and Oversea-Chinese Banking Corporation (OCBC Bank) are to invest US$100 million in the creation of a pan-Asian Internet bank with a regional network.

The regional Internet bank will target the 40 million ‘wired affluent’ consumers that are expected in Asia by 2005. The business model has been developed after extensive study of existing pure Internet banks in North America and the United Kingdom.

To be launched towards the end of this year, the ANZ-OCBC joint venture will be branded separately. The joint venture is expected to be earnings positive by 2002 through a combination of regional growth, reduced customer acquisition costs and scalable technology.

The joint venture will also make selective strategic equity investments in a range of partner companies involved in e-financial services, online content provision and other Internet-based services.

Together, the two banks are investing a total of US$100 million (S$170 million) over three years, including investments in strategic partner companies and start up development costs.

The first partner for the joint venture will be Hong Kong-based online stockbroker boom.com in which ANZ already holds a 10% strategic investment.

ANZ chief executive officer, John McFarlane says: "ANZ and OCBC Bank’s complementary networks, which include banking licences in all the major Asian countries, provide a natural foundation for the joint venture."

OCBC Bank vice chairman and CEO, Alex Au says the new venture will leverage OCBC Bank’s regional network, market knowledge and e-commerce focus, and ANZ’s expertise in technology, e-commerce and alliance management.

“The joint venture forms part of OCBC Bank’s US$590 million (S$1 billion) e-commerce strategy which includes the creation of new business models," he adds.

The new Internet bank will operate as a standalone business headquartered in Singapore, with a separate board and management, systems and culture.

Further details on the joint venture, its strategic partners and customer launch plan will be announced over the next few months.

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