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Boost for ANZ's Thai banking plan despite coup

Canberra Times logo Canberra Times 25/05/2014 Clancy Yeates
Thailand's 12th coup has been met with angry protests on the streets of Bangkok. © Getty Images Thailand's 12th coup has been met with angry protests on the streets of Bangkok.

ANZ Bank's plans to break into Thailand's economy have received a boost after it received permission to establish a subsidiary in the troubled south-east Asian nation, paving the way for it obtain a full banking licence.

ANZ has been eyeing the Thai market for several years as part of its ambitions of becoming a "super regional" bank.

But with only a representative office in the country, it cannot offer its own banking services.

In being granted permission to establish a subsidiary, it has moved one step closer to obtaining a long-sought-after banking licence that would allow it to offer banking services directly to customers.

A spokesman for ANZ confirmed the approval and said it might take another year to obtain a full banking licence. It will continue to operate from its subsidiary office in the meantime.

"The development of a presence in Thailand is an important step for ANZ given the size of Thailand's economy, its importance as a regional manufacturing centre and Thailand's connection to other countries in our network, including the greater Mekong and the rest of Asia," the spokesman said.

The decision comes as Thailand is rocked by protests sparked by a military coup on Thursday. Finance Minister Kittirat Na Ranong approved ANZ's application to establish a subsidiary before he was removed from office, the Bangkok Post reported.

Thailand is seeking to open up more of its financial system to foreign competition and in 2012 ANZ chief executive Mike Smith met now-deposed Prime Minister Yingluck Shinawatra to discuss licence approvals.

ANZ has a presence in 15 Asian nations, including a joint venture it is trying to sell out of in Thailand's neighbour Cambodia, where ANZ Royal has been accused of funding a sugar plantation that used child labour.

ANZ's move is its first expansion into Thailand since it considered an investment in Bangkok-based Thai Military Bank in 2003.

Investors were opposed to the plan at the time and sold off the bank's stock in response and the deal did not go ahead.

Today Asian expansion is a key objective for the bank, which aims to generate 25 to 30 per cent of its profit from outside Australia and New Zealand by 2017.

The approval comes after the Thai military this month wrested control of the country's government, sparking mass protests across the country. The Prime Minister and Finance Minister were both removed by the country's Constitutional Court.

Thailand has taken applications from foreign lenders for licences that will allow them to open 20 branches in the country and 20 off-premises ATMs. The other foreign lender given permission to establish a subsidiary was Japan's Sumitomo Mitsui Trust Bank.

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