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Societe Generale targets above average growth in MidEast for next three years
October 23, 2017 / 2:16 PM / a month ago

Societe Generale targets above average growth in MidEast for next three years

DUBAI, Oct 23 (Reuters) - Societe Generale expects higher growth in its Middle East business over the next three years than most other regions, said the French lender’s chief executive, as it taps opportunities from a regional push to diversify economies away from reliance on oil.

The bank, which has offices in Dubai, Abu Dhabi and Riyadh, expects demand from governments and companies seeking to raise money through debt capital markets, export and project financing, said Chief Executive Frederic Oudea.

“We are preparing our new financial plan for the next three years. We can expect more growth here overall than our average for the whole banking business,” he told reporters in Dubai, referring to growth in revenue and capital.

The Gulf economies have been contending with lower oil prices for more than three years, straining balance sheets and leading to an uptick in debt issues by governments and companies. The volume of international bond issues from the Gulf is expected to hit a record high for a second straight year in 2017 after reaching $69 billion in 2016.

In the past five years, Societe Generale has doubled the growth of its balance sheet and client base in the Middle East, said Oudea.

With interest rates relatively low and oil prices expected to stabilise around $50 to $60 per barrel for the next two or three years, Oudea said it was an important moment for the region to push ahead with economic diversification efforts including building a tax system and controlling budget deficits.

“In the coming two or three years, it is not a major issue if these sovereigns want to do further issues,” he said.

“They’re starting from a situation where they have virtually no public debt.”

The bank will add more headcount in the region selectively but would also rely on the bank’s global expertise, said Richad Soundardjee, Societe Generale’s Chief Executive for the Middle East.

Editing by Ed Osmond

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