Strategy for success: Pick your battles in a wise way
Societe Generale determined to expand portolio in Mena through UAE
Societe Generale sees good business opportunities in the Middle East and North Africa and is expanding its portfolio through its base in the UAE, its top official says.
"We are building on our strong base in the UAE, and also expanding geographically and sectorally in the rest of the GCC. Our strategy is not to be everything to everyone, but to become the champion in our areas of strength, which happen to be extremely well aligned with what this region needs," Societe Generale Richad Soundardjee regional chief executive told Khaleej Times.
In an interview, he said the bank has grown in Oman and Egypt this year, because it suits "our scale".
"We are also making very good progress in Saudi Arabia, Qatar and Kuwait, and we are very hopeful for next year," he said.
Societe Generale has been active in the Middle East since 1997. It established base in Dubai and presence in Abu Dhabi and Riyadh to offer tailor-made solutions to issuers and investors across the Gulf region. It is among the top 10 European Corporate and Investment banks and is also one of the most dynamic retail and wholesale banks across Sub-Saharan Africa.
"We also have a recognised platform in Asia Pacific. The Middle East is at the centre of these regions, and therefore we are looking to leverage our local footprint on different continents via corridors like Mideast-North Africa, Mideast-East Africa and Mideast-Asia," Soundardjee said.
To a question, he said the bank's growth strategy to expand its presence across the Middle East and Africa and some exciting deals are in the pipeline and will be made public in due course of time. "Although we can't name specific deals, I can say that our growth strategy is working. We have acquired clients, invested in specialist teams and balance sheet commitment, and for the second half and next year we have a very exciting pipeline of deals in our areas of strength - asset-backed financing, project finance, ratings advisory, debt capital markets, among others."
"We are also making good progress in the pure investment banking business by having originated a few M&A and ECM transactions that we expect to bring to fruition in the course of 2017," he said.
Societe Generale activities
Soundardjee shared the bank's initiatives taken this year so far and said Societe Generale has been implementing an ambitious five-year growth strategy since 2014 to become a partner of choice for clients in the region. The main pillars of this strategy have been to grow bank's team, acquire more corporate clients, and invest capital in order to execute more landmark transactions both in terms of financing and advisory.
"Our key achievements so far include extending our fixed income and credit derivatives sales platform; establishing a structured finance platform, adding specialists in project finance, export finance, asset finance and debt capital markets; and originating and executing landmark deals in our chosen areas of development in this region."
"This year our focus has been on adapting to the new economic environment. In particular, by supporting sovereigns who are at the centre of this new oil price paradigm, and by deploying further our specific expertise that makes us even more relevant such as ratings advisory, export credit agency financing, equity and debt capital markets, M&A, and project advisory and financing," he added.
Soundardjee said export credit agency (ECA) financing has become very topical in this region and Societe Generale, as a global ECA financing house, has the reach and competence to play a major role. There is huge potential given the need for countries in this region, which have a low industrial base to import capital goods, combined with the competitive cost of financing through ECAs versus straight borrowing.
"We recently participated in the Egyptian Electricity Holding a ?3.5 billion Hermes-backed financing for which we were awarded 'The best overall ECA finance deal of the year' by Trade Finance magazine. We also participated in the financing of Dubai's Al Sufouh Tram," he said.
He said Societe Generale is more active than ever in debt capital markets, which has become a prime source of financing for the region. "This year, we have already been involved in more transactions than in the past two years, including our first public sukuk transactions for ICD and DP World," he said.
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