The Australia and New Zealand Banking Group Ltd announced on Tuesday a new investment plan totaling 2 billion yuan ($317 million) in China while cutting jobs and costs in its domestic market.

The third-largest bank by market value in Australia plans to invest in its locally incorporated subsidiary in China, which was set up in 2010.

Subject to regulatory approvals, the additional capital is the first since an initial investment of 2.5 billion yuan, bringing ANZ China's registered capital to 4.5 billion yuan.

Chief Executive Officer Mike Smith said the additional capital will support further network expansion, increases in customer lending, employee recruitment and product development.

"ANZ aims to become a super regional bank in the Asia-Pacific region, and China is a strategically important market for us.

"We are making good progress towards our goal of earning 25 to 30 percent of group profit from outside Australia and New Zealand by 2017," Smith said, adding that the lender will continue to be an active investor in China.

ANZ announced in February that it will cut 1,000 jobs before the end of September from its Australian workforce, to save costs and protect earnings as loan growth stagnates due to a struggling housing market.

"We believe the global economic difficulties, the structural shift taking place as world economic growth shifts from the West to the East particularly China and India, and the subdued domestic environment play perfectly to ANZ's strengths," Smith said in the 2011 annual report.

In its fiscal first half, which ended on March 31, profit from the Asia-Pacific, Europe and Americas unit increased 21 percent from the previous half, while profit in Australia fell 7 percent.

The lender has seen an 82 percent increase in revenue from its operations in China since 2010, said Charles Li, the bank's China chief executive.

He said the new money injection also aimed to supplement capital, if needed, to make sure the China subsidiary always meets regulatory requirements.

The China Banking Regulatory Commission is working on tougher criteria based on new global standards set by the Basel Committee on Banking Supervision.

By the end of 2011, ANZ China's capital adequacy ratio stood at 16 percent, exceeding the new 10.5 percent requirement for banks that are not systemically important, according to Li.

Smith said the 2 billion yuan would not be used in developing securities and other investment bank business, and the bank would rather concentrate on its own franchise and grow organically instead of through acquisitions.

ANZ China has six outlets in Beijing, Shanghai, Chongqing and Guangzhou and more than 600 employees. It plans to increase its network to 20 outlets in the next five to 10 years, subject to regulatory approval.

It has 20 percent stakes in Shanghai Rural Commercial Bank and Bank of Tianjin, and a fully owned rural bank in Liangping county, Chongqing.

In March, ANZ became the first Australian bank to receive a yuan retail license, meaning it can offer a range of yuan-related products and services to Chinese citizens.

Gilles Plante, ANZ CEO Asia and chairman of ANZ China, said earlier that securing the license was a "significant milestone".

Li said the bank is still going through procedures and will formally introduce yuan retail services to Chinese clients in two or three weeks.

He expected the yuan retail business targeting domestic residents would become profitable within three years, if operated properly.

"We will target a niche market - traders between China, Australia and New Zealand and families related to overseas study and emigration to these regions."

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