A potential deal with the Australian government could secure the future of ANZ’s Pacific branches. Credit: LALAKA/Shutterstock.

Australia is in the advanced stages of discussions on signing an agreement with ANZ Group to ensure the bank’s continued presence in the Pacific region, reported Reuters citing Australia Treasurer Jim Chalmers.

Chalmers said the talks are aimed at preserving ANZ’s nine hubs, including those in Fiji and the Cook Islands.

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The Pacific Island nations have been facing a banking access crisis, as Western banks withdraw from the region, affecting international payments and financial services.

Talks between the parties started in July 2024, when ANZ bank was looking to make its business in the Pacific Islands more viable amid concern about rising Chinese influence in the region.

ANZ said it plans to remain in the region. However, rising risk management costs have made it difficult for these businesses to meet their capital costs.

At that time, ANZ CEO Shayne Elliott told the news agency that its Pacific branches were unprofitable. As a result, the bank was in negotiations with the Australian government about the future of these branches.

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A potential deal with the Australian government could secure the future of these branches.

Chalmers was quoted by Reuters as saying in a speech: “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.”

The importance of banking access in the Pacific has been underscored by China’s growing presence. Beijing has secured several agreements with Pacific island states, including defence and financial deals.

For the full year ended 30 September 2024, ANZ announced a statutory profit after tax of $6.5bn, an 8% fall from a year earlier.