ANZ exits project finance in strategic countries

Standard Chartered completes acquisition of about three quarters of ANZ Bank''s project finance book.

Standard Chartered has bought ANZ Bank's London-headquartered project finance business in a deal first mooted in October last year. Standard Chartered is believed to have paid no premium over book value for the $1.5 billion in loans, swaps and commitments - a price which points to ANZ's eagerness to exit the business.

The business operates in the Middle East, South Asia, Africa, Europe and the Americas and employs about 60 staff. A large number of these staff will transfer to Standard Chartered.

The portfolio of assets includes projects in the power and utilities sector, as well as oil and gas, covering upstream projects, LNG and midstream projects and chemicals. The bulk of these assets are in the Middle East and India.

The sale did not include ANZ's Australian, New Zealand and East Asian project finance exposures, which the bank is hanging on to for strategic reasons. In Asia, ANZ will go head to head with Standard Chartered in drumming up new business given the British Bank's stated new push into structured corporate finance.

Will Rathvon, who has been heading Standard Chartered's project and export finance crusade since April 2003, says the acquisition is a neat fit for the bank, adding geographic and industry depth. "We're excited to start 2005 with many talented new people in our team," says Rathvon, who is based in Singapore.

The project finance business comes under the remit of the global head of corporate finance, Vis Shankar. "In 2003 we identified the project and export finance business as one of the growth engines for corporate finance," says Shankar, who then set about merging the two business units and hiring Rathvon away from Bank of America. "Our ambition is to be the pre-eminent corporate finance house in Asia, Africa and the Middle East, and this acquisition is consistent with that goal."

Standard Chartered made a few of its own project finance hires in India and London last year, but held back on increasing its team when the ANZ acquisition emerged.

This is not the first time ANZ has worked with Standard Chartered to exit a business. In 2000, the Australian bank sold its Grindlays businesses in the Middle East and India to Standard Chartered for $1.3 billion.