DUBAI, March 4 (Reuters) - Societe Generale aims to leverage its experience in structured and transport finance to grow its business in the Gulf, its regional head said.
Gulf countries have earmarked hundreds of billions of dollars for infrastructure projects in coming years, with Qatar alone expected to announce schemes worth as much as $205 billion between 2013 and 2018.
For France’s third-largest bank by assets, this is an opportunity to use its lending capacity and advisory services, said Richad Soundardjee, group chief regional officer for the Middle East.
“This is a region of projects and SocGen is a global project finance house. So the match is obvious and it’s now for us to align ourselves with this huge pipeline that is coming onstream,” he said in an interview at the bank’s Dubai offices.
Soundardjee, appointed as regional head in November, said that while the bank had been in Dubai since 1997, it was only in the last five to 10 years that it had built the first layer of relationships needed to create a flow of deals.
European banks, and French lenders in particular, were heavy investors in the Middle East during the boom years last decade but drew back from the region at the start of this decade as the euro zone crisis forced them to focus on home markets.
Lending to the region dropped and banks sold businesses to bolster capital ratios; both SocGen and BNP Paribas offloaded their Egyptian operations in 2013.
“I think, as a bank, as much as two years ago, it was probably more difficult to say ‘we’re going to make a push on this’ because, like all European banks, we were in the middle of this balance sheet rationalisation,” Soundardjee said. He added that the process was now over so the bank could act.
SocGen said last month that it would return more cash to shareholders in 2014 than last year after completing its long-running balance sheet overhaul.
The bank currently has about 80 staff in the Middle East, covering private banking as well as corporate and investment banking. It has over 154,000 employees globally, including big retail banking operations in France and other parts of Europe.
The bank won’t for now be hiring any additional staff in the Middle East as it has the personnel to implement its strategy and can call upon expertise from elsewhere in the world if needed, Soundardjee said.
In addition to infrastructure business, SocGen is focusing on asset finance, in particular aircraft and shipping. The region hosts three of the world’s largest airlines - Emirates , Etihad Airways and Qatar Airways - which are all aggressively expanding their fleets.
Meanwhile, around 40 percent of the world’s sea-borne oil is shipped through the Strait of Hormuz, the narrow strip of seaway between Oman and Iran.
SocGen is also interested in expanding its export finance and Islamic finance businesses, Soundardjee said without giving details. (Editing by Andrew Torchia)