Australia Negotiates with ANZ Group

By Lewis (JO:LEWJ) Jackson
SYDNEY (Reuters) – Australia is in the final stages of talks with ANZ Group regarding a deal to maintain the bank's branches across the Pacific, Treasurer Jim Chalmers announced on Monday. This represents a diplomatic win for Australia in a region where influence is increasingly contested with China.

Many Pacific Island nations are losing access to banking and international payments as Western banks either close branches or sever ties with counterparts in this sparsely populated and remote region.

ANZ CEO Shayne Elliott stated in July that the bank's Pacific branches, which comprise the largest network in the region, were not profitable. Discussions were underway with the Australian government concerning their future.

Chalmers noted that negotiations had reached their final stages, and the deal would maintain ANZ's nine hubs in the region, including in Fiji and the Cook Islands. He did not disclose the terms or timeline for finalization.

> "The deal we’re working on is another big part of our efforts to keep communities and economies connected, and finance flowing in our neighbourhood," Chalmers remarked in his speech.

Despite bank access being a longstanding issue in the Pacific, there has been renewed motivation for resolution from both Washington and Canberra since China's influence in the region has grown.

China has already secured defense, trade, and financial agreements with several Pacific island states. Earlier this year, the Bank of China signed an agreement with Nauru to explore new opportunities, following announcements from another Australian bank about exiting the country.

In July, Australia hosted leaders and central bankers from across the region to discuss potential solutions to banking access issues. The seriousness of the matter in Washington is reflected in U.S. Treasury Secretary Janet Yellen's virtual opening address during the discussions.

Supported by both American and Australian authorities, the World Bank is also in the process of preparing an emergency U.S. dollar facility to aid countries in the region. This facility would allow access for trade and remittances if these nations find themselves cut off from global finance.