As Chinese banks circle the Pacific, Australia pushes ANZ to stay in island nations

For years, Western banks have been closing branches throughout the South Pacific. State-owned Bank of China has shown it’s eager to step in

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An ANZ Bank building in Sydney’s Central Business District. It is not yet clear if the Australian government would subsidise the bank’s Pacific operations. Photo: Reuters

Published: 10:34am, 12 Nov 2024

Australia will move to stem the exodus of its banks from Pacific island nations, the country’s top economic official said, as concerns mount that China could bolster its influence by filling in the gaps.

For years, Western banks have been closing branches throughout the South Pacific, citing political turmoil, wafer-thin profits and the high cost of doing business.

State-owned Bank of China has indicated it is eager to step in, stoking worries that Beijing could expand its already considerable commercial clout in the Pacific.

Treasurer Jim Chalmers said he was close to signing a deal that would keep Australia’s ANZ Bank open in strategically important nations such as Fiji, Vanuatu, Solomon Islands and Papua New Guinea.

Australian Treasurer Jim Chalmers (right) shakes hands with US Treasury Secretary Janet Yellen before a meeting at IMF headquarters in Washington last month. Photo: AFP

“For too long, Pacific ties have been taken for granted. We’ve done our best to reverse that,” he said in a speech on Monday night.

“A big part of that has been about banking. Taking the time, and doing the work, to guarantee the future of finance in the Pacific.”