Making local trading a focal point

This time last year, there was a lot of discussion about the winners and losers out of the financial crisis as it pertains to foreign exchange. Much of it came in to play - dealers with the strongest franchise fared the best overall, while regional players got a shoe in, in their local markets. But will this last, as markets normalise and new larger dealers pile in?

This year's FX Week Best Banks survey of the FX market certainly reflects a strong performance by regional dealers in their local currencies. One dealer is ANZ, whose success cuts right across client type in the Australian dollar category.

Steve Shuster, Melbourne-based global head of currency trading and FX flow sales at ANZ, said its standing was supported by its AA-rating, commitment to investing in people and systems at a time when other banks were divesting, making it an employer of choice. Recent hires include Christopher Wray, who joined from Citi, and Matt Spicer from Credit Suisse. In addition, the bank acquired Royal Bank of Scotland's businesses in Asia for $550 million.

"Positioning ourselves as Australia and New Zealand's most international local bank, combined with our intimate local knowledge of the Aussie and Kiwi dollar markets and the emergence of our aggressive super-regional strategy, has provided our customers with a unique coverage proposition."

However, as the bank's reach and capabilities have expanded, it remains focused on the local markets and the needs of clients rather than trying to take ground from the major dealers. "At this stage of our growth, as a super-regional player, being relevant to the ANZ target client base is more important than battling it out with the main global dealers in what has essentially become an arms race."

And there's the honesty. As a senior dealer at a global bank said: "This year some of the big players have disappeared or have been distracted, while some of the regional banks have been gaining market share in the local markets. But as conditions normalise this trend may reverse."

Those waiting on the sideline, or actually already gaining market share, include BNP Paribas, Credit Suisse, Standard Chartered and interestingly, RBC Capital.

Saima Farooqi, Editor

Comments? Email saima.farooqi@incisivemedia.com