International Business - AMP Bank Ltd. Expansion in Canada

This report discusses the scope of AMP Bank in Canada, proposed product, consideration for overseas expansion, economic, political and legal analysis, cultural analysis, contemporary issues discussion and financial services in Canada.

RUNNING HEAD: International Business 0
amp bank ltd.
International Business

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Executive Summary
AMP Bank is an Australian service provider. It is subsidiary of AMP Limited. In this report
the scope of AMP Bank in Canada has been defined. The company intend to expand it’s
operations in Canada. The bank is successfully leading it’s activities in Australia. To conduct
activities in Canada the proposed product and consideration for overseas expansion have been
defined. Further the economy of Canada has been introduced by economic, political and legal
analysis. The cultural analysis and contemporary issues discussion has been done to better
understand the scope of banking activities in Canada.

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Contents
Introduction................................................................................................................................1
Company background................................................................................................................1
Propose product......................................................................................................................1
Consideration for overseas expansion....................................................................................1
Introduction to Canada...............................................................................................................1
Economic Analysis.....................................................................................................................1
Economic data........................................................................................................................1
Trade agreements and barriers................................................................................................1
Economic rankings.................................................................................................................1
Political and legal analysis.........................................................................................................1
Role of government in economy, political stability and Risk................................................1
Legal system...........................................................................................................................1
Property rights........................................................................................................................1
Cultural Analysis........................................................................................................................1
Contemporary issues discussion................................................................................................1
Financial services in Canada..................................................................................................1
Ageing population and retirement funding in Canada...........................................................1
Conclusion..................................................................................................................................1
References..................................................................................................................................1

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Introduction
AMP Bank Ltd.is an Australian bank. The bank provides commercial banking services for
retail and institutional customers. The bank offers loans such as consumer, commercial and
mortgage; accept deposits, internet banking, credit cards, insurance and wealth management
services. The bank serves Australia based customers (Bloomberg, 2018). AMP Bank Limited
is a subsidiary of AMP Limited. AMP Limited is country’s largest retail and superannuation
service provider. It also runs the largest life risk business in whole country. The bank
distributes products and services through phone and internet banking. The bank has well
trained brokers and planners who can assist those clients who are in need of banking services.
Company background
AMP Bank Ltd. was incorporated in 1998. It is a financial institution based in Sydney. The
head quarter of bank is in Parramatta, Australia. The bank offers advanced online banking
and mobile banking application to customers. The bank has more than 1 million customers.
The bank has a range of bank accounts to manage money of public. The bank has made
recent changes to digital banking experience. Now it focuses on financial management tools.
The bank provides greater functionality. The functionality covers products and services. The
services offered by AMP are very professional and trustworthy.
Propose product
AMP Bank intends to offer banking services in Canada. The products offered by bank will be
accounts, mortgage loans, commercial loans, consumer loans, accept deposits, internet
banking, credit and debit card and insurance. The bank already offers these products in
Australia (Anand, Bédard-Pagé & Traclet, 2014). The bank can offer the products and
services online. A person does not have need to visit bank to attain products and services. The
bank is already a largest retail service provider and can carry functions effectively in
economy of Canada.
Consideration for overseas expansion
AMP Bank can enter into Canada by making foreign direct investments. The bank can also
engage in cross border lending without being physically present at Canada. It can be done
through a correspondent bank. Canada gives importance to expanding range of financial
services throughout country. The banks are the core of Canada’s financial system. The

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country has significant role of international operations in country (Vahlne & Johanson, 2017).
The government is also working to improve financial services. The bank can be classified as
Schedule II banks under the Bank Act. AMP Bank Ltd. needed to approve grant under part
XII of the Bank Act to conduct banking operations in country.
Introduction to Canada
Canada is a country of North America. Canada has common border with United States. It is
the largest country by total area. It is a developed country and has a diversified economy. The
banking in Canada is considered as one of the safest banking system. The country has the
soundest and safest banking across the globe. The country has made significant regulatory
changes after the global financial crisis. It has been designed to reduce occurrence of global
financial crisis. The Canadian bankers association ensures that the country has a successful
banking system by encouraging effective policies. The country has three supranational
regulatory bodies to influence banking system.
Economic Analysis
Economic data
Canada is one of the wealthiest nations in the world. The country has 10th largest economy in
the world. The GDP growth rate advanced .4% in the last quarter of 2017. The country grew
by 3% in 2017 (Global News, 2018). The household spending in 2017 made the biggest
contribution towards growth. It was followed by inventory and business management. The
inflation rate of Canada shows a global tendency of decreasing inflation rates since 2011. The
inflation rate of country is in good shape when it is compared to rest of the world. The
inflation rate was 1.53% in 2012 and it decreased to 1.13%. Again it reached to 1.79% in
2018 (The Statistics Portal, 2018). The Canadian dollar is stable currency in the world. It can
be traded by long term investors in considerable volume. It has cumulative market share of
almost US$119 billion. The GDP per capita in country was last recorded at 50231.90 US
dollars in 2016 (Trading Economics, 2018). The income inequality has increased in the past
twenty years of country. The richest person has increased share of total national income while
the poor person has lost share. The current population of Canada is 36,887,575 which is
equivalent to the .48 % of the total world’s population. The country uses micro geographic
data for the location pattern of manufacturing industries. The manufacturing is less localised

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in country than other countries. The country has one of the best infrastructures in the world. It
meets all the requirements of high tech business and international trade.
Trade agreements and barriers
The relationship between Canada and Australia is highly productive. In the past both
countries had trade and economic co-operation agreement to acknowledge mutual benefits
(Avkiran, 2017). Canada is a member of WTO (World Trade Organisation) since 1995. The
foreign company faces high tariffs for certain products in Canada. There is requirement of
import licenses. The trade barriers are to understand differing provincial regulations and due
diligence on sale channels. There are also technical standards to specify characteristic of
products and the certification requirements before entering in country’s market (Johanson &
Mattsson, 2015).
Economic rankings
The Canadian economy ranks second. It is second only after Ireland. The country has worked
in the last three years with strong growth (Penrose, 2017). Overall the country ranks 9 among
16 peer countries. The economic performance of country is measured by considering three
dimensions:
 Economic wealth
 Economic disadvantage and privation
 Economic sustainability
Political and legal analysis
Role of government in economy, political stability and Risk
Canada is a democratic country with a parliament government. The government is made up
of three parts: federal, provincial and municipal. The country has multi-party system. The
dominant political parties of country at present are Conservative party of Canada and Liberal
party of Canada. The federal government have more active role in economy. The corruption
does not represent considerable obstacle of doing business in Canada. The country has clear
cut regulations and transparent courts (Dow, 2016). It has also implemented policies to
reduce corruption. If we talk about banks then level of corruption plays role in the
applications for bank loans. Canada is the 11th largest economy in world based on the nominal
GDP. The country is considered as one of the most stable economies in the world. The

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European debt crisis and weak state of United states’ economy are risk for country’s
governing conservatives.
Legal system
Canada is governed by the laws. The laws are written, organized and enforced through the
legal system of Britain. The English common law is still applies to country however Canada
is completely independent from Britain. The law is a collection of precedents and age old
understandings that defines the legal concepts in English. This law is not written down as
legislation. It is a rule that guides judges in later decision making in the similar cases. The
common law can be found only in past decisions not in any code. It also adapts to the
changing or prevailing circumstances. It is because judges can announce new legal rules and
guidelines (Meadowcroft, Stephens, Wilson & Rowlands, 2017).
The other law is civil law system which is opposite of common law system. It is the French
and Spanish tradition of writing which is very precise and specifies laws. The interpret laws
are judged in a strict and literal way. It considers the conditions of particular case. It does not
consider historical precedent. It considers the general rules to deal with any disputes which
may arise. First the courts look into civil code in a civil law system (Kim & Li, 2014). Then
previous reasons are referred. Quebec is based on French Napoleonic code and is the only
jurisdiction with a civil code.
Property rights
The property law in Canada concerns right of individuals over land objects and terms within
country. It includes personal, real and intellectual property. The foreign investors or
companies have full access to Canada’s legal system. The countries have mechanism
available for the dispute resolution. The recording system for mortgages and liens is
consistent. The right to own property in Canada is not included in the bill of rights. The real
property law is a matter of local legislation with incorporation of common law rules
(Murphy, 2017).
A business need to be aware of business regulations before starting business in Canada. The
rules and regulations ensure that the marketplace is safe and fair to everyone. The federal
government have recognized employment standards to make sure that the employees are
treated equally. These standards comprise minimum wages, leaves and annual vacations,
statutory holidays and hours of work and emergency requirements. Certain industries fall

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under the federal regulations whereas others conform to provincial or territorial employment
standards.
Cultural Analysis
The culture of Canada is mixture of British, Fresh and American. The national language of
country is French and English. The non-official languages spoken are German, Spanish to
Punjabi and Chinese. The education programs in country begin in kindergarten (age five) and
go to twelve grades. After completion of school students can go for post-secondary studies.
The Canadian aesthetics association is a regulatory organization of professionals who eager
to raise bars for professional aestheticians. It organises education for members. The social
organisations of country focus on range of community development and social justice issues.
The religion in country comprises a wide range of groups and beliefs. Christian is the largest
religion of Canada. The international business management program provides understanding
of versatile international management skills and knowledge for growing demand of
international trade.
According to Hofstede the culture of Canada is overviewed with six models such as power
distance, individualism, masculinity, uncertainty avoidance, long term orientation and
indulgence. The psychic distance is the distance between home market and foreign market of
country which results from perception and understanding of cultural and business differences
(Romero, Laroche, Aurup & Ferraz, 2018). Canada has high context cultural issues and is a
perfect place to begin. It accommodates to new organisations. The people of country are
civilised, tolerant and relatively informal. Shaking hand is the standard for business meetings.
The normal working days are Monday to Friday.
Contemporary issues discussion
The contemporary issues of Canada include politics, economic and social structures, cultural
and arts policy, multiculturalism, science and technology and bilingualism. The banking
system was exposed by the crisis in country. The collapse of Lehman Brothers is widespread
model of the failure of banking systems (Bastos & Zimmerman, 2015). In 2008, major banks
were either failed or rescued by the state. To overcome such issues government focused on
some factors such as building capital, reducing leverage and belt and suspenders. The G-20
started with firming bank capital regime. The quantity and quality of bank capital was
proposed to improve in the new Basel III rules. The requirement of equity will rise from 2%

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to 4.5%. It will rise to 7% at the time of new capital maintenance buffer. The new rules will
bring more disclosures on balance sheets and will require more capital against the riskier
activities such as trading activities and securitisations. The measures will be implemented by
government in the next six years. The banks in Canada are constrained by the leverage ratio.
It sets a cap on the number of assets can be hold for each dollar of equity. It defends the
system from risks (Klinger, 2017). The belt and suspenders approach of ratios establishes two
standards for maximum amount of assets that a financial institution can hold related to equity.
The FSB and G-20 are continued to put pressure of transparency and peer pressure to ensure
the organisation is playing safe. The bank resilience function is much more than just capital.
It requires better risk management and better governance (Smallbone, Welter & Ateljevic,
2014).
Financial services in Canada
Canada has the strongest financial service sector in the world. The financial service sector
comprises banks, insurance companies, trust companies, credit unions, finance and leasing
companies, mutual fund companies and insurance agents and brokers. FDI (Foreign Direct
Investment) in country’s financial and insurance industries have reached to $121.5 billion in
2016 (Government of Canada, 2018). The financial firms in country are extremely
advantageous. The technology is one of the vast areas to make investment in the financial
sector. The country is leader in fostering innovation and creation of companies in the
financial technology sector. The adoption of new technology and active investment by
leading Canadian venture capital funds are the factors which support leadership. The
financial institutions need to align their technology strategies and investments to effectively
build business (Li, et. al. 2016).
Ageing population and retirement funding in Canada
The ageing population affects country in many ways. Out of them some consequences are
fairly straight forward while some are regarded as labour supply. The ageing population is
ageing more rapidly than in the past years. The country’s ageing population is going to affect
government finance in two ways. First is the slowest growth in government revenue which is
due to the expectation of economists of slower rate of economic growth. It shows that the
largest share of population to be is retirement age. Second, the pressure will be placed on
programs. These programs are complex to demographics such as health care and income
support programme for seniors (Gierveld, Van der Pas & Keating, 2015).

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As the baby boom generation starts to retire, the population is ageing more rapidly. The
retirement plans are run on “pay as you go” basis. As the baby boom ages, the contribution
rates rises significantly. An alternative is also set as contribution rates at long term levels.
Such policies contribute a significant rise in contribution rates. The system copes up with the
retirement of baby boom generation. The Quebec government has made proposal to make
changes in the Quebec pension plan (Schneider, 2016). These changes are going to increase
target benefit payable. The employment earnings from 25 % to 33.3% will increase the
maximum earnings recognised for determining benefits and contributions.
Conclusion
From the above report, it can be concluded that AMP Bank Limited can successfully conduct
it’s operations in Canada. The bank will be new in country so the macro environment of
country has been defined. It is going to help bank to be aware of the business in country. The
government and economic factors have been defined for the interest of organisation. The
financial services of Canada have defined the scope of banking services of AMP Bank. The
factors such as political and legal analysis, culture analysis, ethics and contemporary
discussion provides help in predicting business of AMP in Canada.

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References
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