NAB opens farm gate to China
NATIONAL AUSTRALIA BANK will target the growing trade in agricultural goods between Australia and Asia as it seeks to ramp up its push into the world's fastest growing region.
In a rare glimpse into the bank's Asian expansion plans, NAB's executive director of finance, Mark Joiner, said the bank was aiming to bring together Asian investors and Australian producers to develop the country's farming sector.
While ANZ is bulking up its on-the-ground presence across Asia, NAB will shun the full-service approach, seeking to build on its position as a key lender to Australian businesses and the biggest lender to farmers.
"With an emerging middle class [in Asia] of this size, I think soft commodities are just going to get stronger and stronger over the next 20 or 30 years," Mr Joiner told Fairfax Media. "I see that as a real growth centre."
He said Australia was well positioned to take advantage of Chinese concerns over food security and suggested the debate over Chinese investment in Australia had been blown out of proportion on occasions.
"Australia and New Zealand are well regarded by the Chinese," he said. "I think they will like to find people they could partner with and direct investment opportunities in Australia."
NAB is the latest of the big four to talk up its expansion plans for Asia, after Westpac opened the bank's first Indian branch last week.
In a further move to bolster its ties in China, NAB signed a memorandum of understanding with China Development Bank on Monday. The agreement is intended to strengthen collaboration between the banks in capital markets, trade finance and currency activity.
In targeting agribusiness, NAB is focusing on an industry that is tipped to be a key winner from Asia's growing middle class. Last year, the Prime Minister, Julia Gillard, said the government wanted to turn Australia into the food bowl of Asia.
However, Chinese investment in agriculture has been embroiled in controversy, with last year's purchase of Cubbie Station by China's Shandong Ruyi reigniting the debate over "selling the farm".
Mr Joiner said the debate in Australia had sometimes been blown out of proportion. "As a nation, we are more inclined to support it and then resist it," he said.
Unlike its rivals at ANZ and the Commonwealth Bank, NAB does not have a large physical presence in Asia. However, Mr Joiner said the bank's strategy for Asia is centred on its "core franchise in Australia", serving the financing and investment needs of its business clients.
He questioned the approach of his competitors, saying it should not be presumed that Australian banks could provide better retail services than the existing retail banks in Asia.