* BNP seeks to expand in fast-growing African mkts
* Lender changes business model in the region
* To focus more on advisory roles than plain lending
* BNP opened South Africa branch last year
By Mirna Sleiman and Dinesh Nair
ABU DHABI, March 3 BNP Paribas,
France's No.1 listed bank, plans to boost its investment banking
footprint in Africa as it favors promising growth markets away
from the riskier euro zone, its regional head said.
BNP, which is also eyeing an expansion drive in Asia, has
changed its regional business model to focus more on advisory
rather than just lending for big projects, said Jean-Christophe
Durand, the bank's chief executive for the region.
While BNP is relatively well-capitalised after a year-long
drive to cut its balance sheet and shrink its holdings of risky
eurozone sovereign debt, it is heavily exposed to mature
European markets and is under pressure to show investors new
paths to growth.
That is prompting the bank to seek emerging markets growth.
"For the bank, Africa will be a growing area for business
and we will invest cautiously to seize opportunities, which are
in line with the strategy of the bank," Durand, CEO for Middle
East and Africa region told Reuters in Abu Dhabi.
The executive sees high potential in Nigeria with its large
population, a well-developed banking sector and major
investments planned. The bank also sees Morocco as a key market
to expand in North Africa, Durand said.
BNP has been hired by Etisalat to advise the UAE
telco on a potential bid for Vivendi's 53 percent stake
in Maroc Telecom, sources told Reuters last week. The
stake is valued at nearly $6 billion in the market.
It opened a branch in South Africa after getting regulatory
nod last year. Durand did not give specific details on the
bank's hiring plans for Africa.
BNP agreed with UAE's Emirates NBD to sell its
operations in crisis-ridden Egypt for $500 million. Its rival
Soceite Generale also sold its Egyptian arm to Qatar
"We are not retrenching from the region. We want to preserve
the global reach we have," Durand said.
Large European banks, including the likes of BNP, have
historically lent heavily to the region but are under pressure
to boost their capital ratios in the wake of the euro zone
The French bank's business model in the region has hence
changed and it is no longer just looking to lend for big-ticket
projects and is seeking a wider advisory role, Durand said.
"When people used to talk about BNP Paribas in the region,
they used to think of it as a project finance bank. The ways of
financing the development in the region is going to take another
shape," he said.
"What we will change is the way we do business within the
new banking environment. We will be advising and we will also
match different types of investors with financing requirements."
Infrastructure requirement in large Middle Eastern nations
such as Saudi Arabia is expected to be in billions of dollars
post the impact of the Arab Spring, prompting government and
large institutions to look at a range of financing means.
"Borrowers need to look at investors, such as pension funds
(locals, regional or international ones), and also need to look
at capital markets," Durand said.
BNP was ranked fifth in arranging debt issues from the
Middle East last year, according to Thomson Reuters data.
The bank was mandated lead manager on Abu Dhabi energy firm
Taqa's $2 billion two-part bond sale in December and
acted as joint bookrunner on IPIC's $2.9 billion dual-currency
bond, in November.
(Editing by Sanjeev Miglani)