By George Chen and Kelvin Soh
HONG KONG (Reuters) - Australia and New Zealand Banking Group (ANZ.AX) has applied for a license that would allow it to invest in China's capital markets as it expands in the world's fastest growing major economy, the lender's China head said on Wednesday.
ANZ has also received preliminary approval from the China Banking Regulatory Commission for a branch license in the southwest city of Chongqing, Gilles Plante, ANZ's chief executive of North-East Asia, Europe & America, said at the Reuters China Investment Summit.
"It's all about pace for us now," he said at the summit in Hong Kong. "When you've had the kind of growth as we've had in the past few years in the region, we've really got to pace ourselves and decide what we want to focus on."
Upon receiving the Qualified Foreign Institutional Investor (QFII) license, the bank will focus on fixed-income instruments such as yuan bonds to support its operations in the country, Plante said.
Foreign investors with QFII licenses, including Goldman Sachs (GS.N), JP Morgan (JPM.N) and smaller players such as Singapore's DBS Group (DBSM.SI), have pumped about $18 billion into China's stock market under the eight-year-old scheme.
Besides its own operations in China, ANZ also owns a 20 percent stake in the unlisted Bank of Tianjin and Shanghai Rural Commercial Bank, the maximum foreign ownership allowed under Chinese regulations.
"These investments have made a lot of sense for us because of the cross-referrals that take place between us and them," Plante said. "They've both worked out to be very good investments."
YUAN DEBT CAPITAL MARKETS
The bank will also be active in the debt capital markets and syndicated loan sectors, having recently joined a consortium of nine other banks such as Hang Seng (0011.HK) to extend a $50 million loan to China Automation (0569.HK).
It will also begin accepting yuan deposits in Hong Kong for its retail customers within two months, and it has already begun handling yuan-denominated trade settlements for its institutional clients, the latest bank to join the territory's fledgling offshore yuan market.
"I was just looking at the plan for next year, and it's already several pages long now," Plante said. "We recently organized an Australia-New Zealand day, bringing clients together to talk about funding opportunities."
A sustained pick-up in yuan trade settlements and rising yuan deposits in Hong Kong is spurring the development of a full-fledged currency market, after China eased restrictions allowing the currency to be traded more freely in the territory.
(Additional reporting by Doug Young; Editing by Ken Wills)