Guest post: The Can Do approach to business building
By ASB Institutional Banking
The capital creating capabilities of New Zealand’s corporate banking services
When it comes to doing business, New Zealand has an impressive string of accolades that make it one of the premiere locales for starting a business or investing in one. According to the World Bank Doing Business report of 2011, New Zealand ranked third in the world for ease of conducting business and first for protecting investors. Add to that the fact that it is one of the top two least corrupt countries on the planet (Transparency International, Corruption Perceptions Index 2010) as well as the premiere locale for lack of protectionism (IMD, World Competitiveness Yearbook 2010) then one can clearly see why New Zealand is lauded as one of the leading countries in the world for supporting capital development, research & development, and international investment.
With its noticeably strong banking sector, which emerged from the recent global economic crisis fairly unscathed, New Zealand offers many local as well as foreign enterprises the opportunity to start, build and grow their businesses in a corporate-friendly environment. New Zealanders pride themselves on their ‘Can-Do’ attitude, and when it comes to their approach to building and growing businesses their corporate finance sector is no different. Due to the fact that there are no restrictions imposed on the flow of capital or earnings of a New Zealand business to overseas investors, meaning that profits, dividends, interest, royalties, or management fees can be moved freely either into or out of the country, many businesses find themselves in need of corporate banking services that can be tailored to best move their specific business objectives forward. This being the case, it becomes pivotal for any business to forge a partnership with a bank that has both the local appreciation and awareness of the domestic business climate as well as the international clout of one of the bigger banks in order to be able to provide their clients with all the capital, logistical, technical and strategic wherewithal to see their financial objectives into fruition.
In a nutshell, corporate banking relates to the services and products that banks provide to their corporate clients. So, from short-term finance, trade finance or cash management services to the far more complex services such as advising and facilitating large transactions, mergers, acquisitions deals, IPO’s and specialist lending, corporate finance services cover a wide array of products and services that are all geared toward expertly helping businesses optimally set, define and achieve their business objectives on both a domestic and international level.
Essentially the corporate finance services and products offered by New Zealand’s leading banks can be broken down into five key areas of expertise, these being; loan markets, structured asset finance, acquisitions and leverage finance, securitization and project finance.
Depending on the particular size and needs of a business, be it a short-term bridge loan to invest in an expensive piece of machinery or the more complex, strategic and comprehensive alliance of banking services and products required to facilitate a ‘buy in’ or’ buy out’ of another company, the need for practical, expert support and guidance in the form most seasoned corporate financial advisors are trained to provide is crucial. New Zealand’s corporate financing sector is well established to provide this level of support to virtually any size business owing to its stable and globally competitive economy. Furthermore, all but one of the five banks with the largest presence in New Zealand are owned by larger Australian banks. What this equates to is a banking sector that is able to provide far more leverage and expertise when it comes to meeting the capital needs of businesses.
Although New Zealand is a relatively small country, it is still a relatively heavy hitter on the economic front. It boasts a banking sector that is stable, well-regulated and proficient at executing corporate finance solutions to businesses across a wide range of industries. Corporate banking services in New Zealand afford businesses access to global markets, global transaction banking, capital markets, debt facilities, risk management and advisory services on par with any banking sector, anywhere in the world. This coupled with its corporate friendly environment, lack of corruption and absence of restrictions imposed on the flow of capital make doing business in New Zealand just about as appealing as living there.