House of the Year, Australia: ANZ Bank
The global pandemic has, in some ways, accelerated the market for investments in sustainable finance. The issuance of these products has reached record levels over the past 18 months. ANZ Bank has proven to be a market leader in this space, garnering several sustainability-related deals in Asia that were the first of their kind, while also being at the forefront of product innovation among Australian banks.
“Businesses continue to operate during uncertain times in global markets amid the continuing effects of the pandemic,” said Shayne Collins, head of markets for ANZ.
“TO ANZ, we continue to support our customers with the right services and products to ensure they are running smoothly and at optimum capacity. Our international network and market-leading solutions ensure that we are well positioned to meet the changing demands of our customers and the market.
In terms of sustainable finance, ANZThe predominance of Australian debt and its cross-border structuring capabilities put the bank ahead of its competitors.
“ANZ is the leader in sustainable finance in the Asia-Pacific region. We have seen the markets evolve from sustainability-linked loans to sustainability-linked bonds, with an expected shift towards sustainability-linked derivatives over time. We are at the forefront of this development, ”said Paul White, head of capital markets at the bank.
Since 2020, the bank’s sustainable finance team has grown steadily, comprising a global team of over 20 members with expertise in multiple banking products and industry sectors, as well as technical knowledge in sustainability.
“When you bring together the loan, bond and sustainable finance teams, it’s a solid platform to work with in terms of innovation and origination,” White says.
“We are also very active in cross-border transactions, bringing our domestic clients to Asia and our Asian issuers to Australia and New Zealand. “
Sustainable debt products
ANZ commits to fund and facilitate at least A $ 50 billion (we$ 36.5 billion) in sustainability solutions by October 2025. Over the past year, the bank has put in place over A $ 70 billion equivalent in green, social, bond and loan equivalents. sustainable and linked to sustainable development in Australia, New Zealand and Asia for corporate clients.
In June 2021, ANZ Acted as lead arranger and sustainability coordinator for Australia’s AU $ 1 billion conglomerate double-tranche sustainability bond Wesfarmers (SLB) emission. The agreement was the first SLB Australian domestic debt market transaction.
In February 2021, the bank also helped Surbana Jurong, a Singapore-based urban infrastructure and services consultancy, launch the first SLB issue in Southeast Asia – and the first denominated in Singapore dollars. ANZ has been given a mandate as Associate Bookrunner and Sole Sustainability Coordinator. The 250 million Singaporean dollars (we$ 185.8 million) SLB The agreement also underlined the bank’s expertise in advising in developing a tailor-made sustainability framework and sustainability performance targets for the bond that aligned the objectives of financing, activity and environmental, social and governance of the issuer.
We have seen the markets evolve from sustainability-linked loans to sustainability-linked bonds, with an expected shift towards sustainability-linked derivatives over time. We are at the forefront of this evolution
Paul Blanc, ANZ Bank
These two agreements followed on from the very first notes linked to the sustainable development of the region, issued last December by the agribusiness and agrifood Olam International, for which ANZ acted as sole manager, swap trader and sustainability coordinator. The 7 billion euros (we$ 63.6 million) five-year notes were issued to a single investor through a private placement.
The next step in the evolution of sustainable finance products is the sustainability derivatives (SLDs), which ANZ thinks it is in a good position to market it. The bank said it was one of the first Australian banks to provide SLDs helping clients achieve their sustainable development objectives and hedging plans.
“Overall, only a handful [of institutions] executed derivatives related to sustainability. SLDs are the next logical step in the evolution of the sustainable finance market in the transition to net zero carbon, ”says Damian Underwood, Head of Market Solutions at ANZ.
Risk management capacity
As the pandemic disrupted financial markets last year, ANZ worked with the Australian government to maintain the integrity and viability of the market.
The May 2020 issue of a record A $ 19 billion of Treasury bonds at a fixed rate of 1.0%, with a maturity of December 21, 2030, saw ANZ appointed the hedge and risk manager for the transaction – in addition to being part of the mandate group of the four banks. It was the largest new benchmark Australian dollar syndicated issue at the time, with an order book three times oversubscribed by a diverse group of global investors.
“We are not only responsible for the execution [and] distribution of the transaction, but also for hedging and risk management. In the case of large transactions, the role of the hedge and risk manager is to ensure that the risk is managed smoothly in a stable market environment to set the price of the transaction, ”explains White.
“We worked as a hedging and risk manager with the AOFM [Australian Office of Financial Management] on two of these government bond issues in 2020. “
Digitization to the end
Looking ahead, the bank says it will continue its digitization efforts as the fundamental changes in financial markets brought about by the pandemic bode well for its business prospects.
“There is no doubt that the Covid-19 situation has accelerated the digitization of the market and the execution of foreign exchange, rate and credit transactions across all platforms. TO ANZ, we are lucky to have a API [application programming interface]product strategy based on a product strategy, so that we can react early to changing customer and market trends, ”said Luke Marriott, head of electronic fixed income, currencies and commodities at ANZ.
APIs allow applications to access data and interact with external software components, operating systems or microservices.
The bank already has an algorithmic client execution platform, which among other things was introduced in February 2019 to provide more personalized client solutions, which help ANZ better understand customer challenges and needs through data analysis.
ANZ is also mapping everything into a single system across its institutional banking operations, obtaining database storage and cloud capacity, and generating the right signals, using artificial intelligence, to help businesses. dealers to more effectively access its platforms and provide quantitative strategic solutions for the well-being of its customers.