DID WE EVER FORGET THE ANZ BRAND?

After two failed attempts, ANZ is finally set to start its Indian operations. In a crowded and regulated market, how will the ANZ brand be able to differentiate itself from its foreign peers and the state run banks?

It could well turn out to be a classic case of the return of the prodigal son in the banking landscape. It was on July 31, 2000 when the Melbourne based lender Australia and New Zealand Banking Group (ANZ) sold its Indian unit Grindlays Bank to Standard Chartered Plc for $1.34 billion (approximately Rs.61billion considering current exchange rate). Later, in 2006, ANZ made a failed attempt to enter the Indian market in 2006 by buying a stake in IndusInd Bank; then waited for two long years to get the banking license from the Reserve Bank of India, RBI, before finally managing to get an in-principle approval for a foreign bank license in March, 2010. Soon after getting the in-principle approval from the banking regulator, RBI, Alex Thursby, CEO, Asia Pacific, Europe and America, said (in a press statement), “This is an important step for ANZ as part of a long term commitment to progressively rebuild our presence in India... India is a real market of substance, I am confident it will give us a good part of the Aus$1.5 billion 2012 targeted profit from Asia.” The simple question: will India work for them? To answer that, we decided to break up our analysis into two parts: factors that work for them and factors that don’t! First, the factors that do:

The ‘ANZ’ brand: In short, it’s the biggest plus for them. Ask yourself, even though ANZ Grindlays left India ten years ago, did you ever forget their brand name? Evidently, the recall value that the brand holds is pristine and very high. But it goes beyond that. “The trust and respect that the brand used to command in India has not diminished over the years; and in fact has perhaps increased given their superb showing during the recession,” says Namita Chhetri, Head, Indian Council for Market Research. That clearly holds weight, when one sees how brands like Citigroup have taken a beating given their huge financial hits.

Logo change: A huge plus again. Since the start of 2009, ANZ has worked considerably towards changing its brand identity. It started with the logo (see image), where ANZ – apart from reducing the various lines running through the logo – introduced an additional symbol they identified as the lotus, which contained the outline of a sitting human (who ANZ says represents their customers and employees) with a halo behind the head. In South East Asian markets, this human was perceived as a sitting Buddha, leading to huge positive brand building. In India, that may work.

Positioning shift: But perhaps the biggest plus in ANZ’s ad strategy that’ll work in India is not anything of the above, but the fact that tactically, over the last year, ANZ has moved towards projecting the image of being an uncomplicated bank. Their tag line became, “Uncomplicated Banking. Simple Solutions to Complex Problems.” More because – as per ANZ’s own past acceptance – the perception in consumers about the bank was that they had become too large and too “fragmented.” To that effect, the Indian consumer will appreciate the simplicity approach, given the complexity current Indian banking systems have. Having said that, there obviously are the minuses too.

Distribution: ANZ’s current strategy is not to be a mass market bank in India, but rather to provide niche services in wealth and affluent banking. The key differentiating factors in its measured strategy to grow are: establishing partnerships with local partners in the retail financial services markets, as well as operating through a network of local branches and offices, primarily in trade, project finance and corporate transactional finance. Clearly, to develop ‘partnerships’ in India takes a very long time, especially given India’s geographical expanse. And money in India is where the retail market is.

ANZ is attempting to takeover Indian consumer finance operations of ABN Amro Bank NV (depending on how their global negotiations proceed with RBS). But unfortunately, firstly ABN Amro’s India retail presence is pitiable (31 branches only); and secondly, HSBC has given an opposing offer to take over ABN Amro, leaving ANZ’s in no man’s land.

Competitive pressures: Since 2000, when ANZ was present in the Indian market, the situation has changed considerably in the Indian banking arena. Sample this. In March 2000, 42 foreign banks contributed about 7.49% to the total assets of the banking system; in March 2009, the number of foreign banks had declined to 31 and the contribution to total assets of the banking system increased to 8.53%. In absolute terms, gross assets of the banking system has shown a whopping 374% increase in a span of nine years. That means that ANZ will not only have Indian banks to deal with, even foreign banks have a head-start that would be extremely hard to beat.

But as they say in downtown, the Indian market can be a ready mistress if you show it the money. ANZ surely has that much to impress. And like we said, we never forgot it anyway, did we?