ANZ promises to remain in Pacific

Labor is on the cusp of closing a major deal with ANZ to ensure the bank does not follow some of its rivals and withdraw services from the Pacific, creating a potential opportunity for China.

Federal Treasurer Jim Chalmers. Picture: NewsWire / Martin Ollman

Labor is on the cusp of closing a major deal with ANZ to ensure the bank does not withdraw its services from the Pacific, following the exit of several banks from the region in a worrying trend that has sparked concern over the opportunity the potential vacuum presents to China.

In a speech to the Australian Institute of International Affairs, Treasurer Jim Chalmers revealed he was close to securing an agreement from ANZ to keep its services running across Pacific island nations.

“I can confirm we’re in the final stages of negotiations with ANZ to secure its continuing banking presence in the Pacific,” he said.

“This will ensure ANZ’s nine existing operations – from Fiji to the Cook Islands – maintain their services.”

Banks that have announced closures in recent months include Bendigo Bank, which confirmed it would withdraw from Nauru next year, while Westpac last year also tried to sell its Pacific firms in Fiji and Papua New Guinea.

ANZ has already closed 10 branches across the region and exited American Samoa and Guam.

The ongoing closures open up the potential for China to move in and offer services and investment to Pacific island countries as part of its efforts to increase its presence in the region.

Dr Chalmers said the agreement with ANZ was a significant part of Australia’s efforts to keep “finance flowing in our neighbourhood”.

“The deal we’re working on is another big part of our efforts to keep communities and economies connected,” he said. “It’s as good an example as any of the contribution we can make in economic portfolios to our foreign policy efforts.”

Australia has endeavoured to remain the “partner of choice” for Pacific island nations, particularly in the wake of countries like the Solomon Islands striking a controversial security deal with China in 2022 that allowed for police forces and other infrastructure to be set up in the Solomons.

Labor’s deal with ANZ follows other firms muscling up to maintain a strong presence in the Pacific, including AustralianSuper, which struck a memorandum of understanding with the Pacific Islands Investment Forum to share knowledge with local funds in the region.

Under the plan, key personnel from Pacific provident funds will do placements with AustralianSuper to learn more about Australia’s superannuation system and how the nation makes investment decisions.