SYDNEY - Australia New Zealand (ANZ) Banking Group Ltd will pocket $1.323 billion once it offloads its 20 percent stake in Shanghai Rural Commercial Bank (SRCB) to China COSCO Shipping Corp and Shanghai Sino-Poland Enterprise Management Development Corp.

"The sale reflects our strategy to simplify our business and improve capital efficiency," ANZ deputy chief executive officer Graham Hodges said in a statement to the ASX on Tuesday.

China COSCO Shipping and Shanghai Sino-Poland Enterprise Management Development Corp will each obtain an equal 10 percent stake in SRCB for a total of 9.190 billion yuan ($1.323 billion). The sale, representing a price-to-book ratio of 1.1 times SRCB's net assets, is to be completed by mid-2017 following regulatory approvals.

The banking giant has been making large changes in Asia following its ambitious expansion plan that carried mixed results under former chief Mike Smith, notably the selling of its retail operations to Singapore's DBS Bank at the end of October last year.

ANZ has denied it is taking a complete withdrawal from Asia to focus on its domestic footing after loosing market share to its larger rivals, saying it is eyeing three full service markets for institutional customers outside Australia and New Zealand.

"This sale will allow us to focus our resources on our Institutional Banking business in Asia," Hodges said.

"This includes a significant commitment to China over the past 30 years with 100 percent ANZ-owned branches in Beijing, Shanghai, Guangzhou, Chongqing, Chengdu, Hangzhou, and Qingdao serving our institutional clients."

The relationship with SRCB provided the platform for ANZ to gain its full banking licence in China in 2010, while also supporting the expansion of its Chinese branch network. ANZ obtained its 20 percent stake in SRCB in 2007.

ANZ will use the sale's proceeds to increase its tier one capital ratio by approximately 40 basis points, the bank said.

By 10:20 local time (AEDT), ANZ's shares were 1.12 percent higher at 30.76 Australian dollars, in line with gains on the broader benchmark index.