KEY POINTS:
The Australian-based ANZ Banking Group has set itself up as a branch in New Zealand.
Australia and New Zealand Banking Group announced to the NZX yesterday that it had established a licensed banking branch in this country, effective immediately.
The company said that until now it had operated a bank model in New Zealand, under which all loans to customers here had been organised through the local ANZ National brand.
Spokesman Cameron Davis said that under the new model, ANZ could decide whether it wanted to issue and fund loans in New Zealand through ANZ National or through the bank's parent, Australia and New Zealand Banking Group.
ANZ said the move was prudent.
Davis said access to funds for New Zealand borrowers would not change. "It's got no negatives. It's got positives. The positives are that you've got more flexibility."
The bank ran two independent funding programmes - one through New Zealand and the other through Australia, he said. "They'll continue to operate independently. It just means that we can now choose to a degree whether or not we have the parent funding some of the loans.
"In the current environment, where it's quite possible that you've got your debt investors out there that have certain limits to certain countries, then you want the option of flicking from one to the other if you need to."
David Tripe, of Massey University's Centre for Banking Studies, said the move would be particularly relevant for large corporate and wholesale business.
He said the Australian Prudential Regulatory Authority limited the amount Australian banks could lend to their New Zealand subsidiaries. "What this does is they can provide funding into New Zealand other than through their New Zealand subsidiary."
Commonwealth Bank of Australia, which owns ASB, and Westpac also both had New Zealand subsidiaries and branches, Tripe said. It would be no surprise if the BNZ's parent, National Australia Bank, followed suit.
Average customers would continue their relationship with ANZ National and would not notice any difference, he said.
An ANZ statement said: "In the current environment ANZ believes it is prudent for banks to maximise the range of funding options available to them and funding from the parent bank is one of these options."
Other mechanisms included ANZ National's recently established securitisation programme, the Reserve Bank of New Zealand's term auction facility and the Crown guarantee.
GROWING OPTIONS
* ANZ National Bank is the New Zealand subsidiary of Australia and New Zealand Banking Group.
* Now ANZ Banking Group has also registered as a licensed banking branch in this country.
* The Australian-owned group says the move gives it more flexibility.
