Wednesday, Mar 14, 2012
-- Headcount in Middle East hasn't changed
---Mideast countries need to continue diversifying, developing legal systems
---Seeks more sukuk, advisory mandates in Saudi Arabia
By Nicolas Parasie
OF ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--French bank BNP Paribas (BNPP.FR) in the Middle East will focus on reducing costs, while seeking a bigger share of capital markets activity in Saudi Arabia, the Arab world's largest economy, the lender's top executive said.
"Cost reduction is always important. There are always reviews on how we can reduce costs, now it doesn't necessarily mean reduce people. There are many other ways of doing it: you can do it by streamlining your organization, by automatizing operations, by mutualizing strengths," said Jean-Christophe Durand, regional head of BNP Paribas Middle East in an interview Tuesday.
The French bank has its regional headquarters in Bahrain, the island-state which for more than a year has been the scene of political unrest whereby a Shi'ite majority is challenging the Sunni rule. Bahrain, once the pre-eminent financial centre in the Arab Gulf, is still home to many local and international banks who hope an increase in government spending will boost the local economy. Elsewhere in the region, governments have pledged to pour billions into infrastructure projects, a welcome boost for local lenders following the global financial crisis and regional real estate downturn.
"The challenge is for these countries to continue the diversification, to continue developing legal systems--and we have seen in all the countries a lot of progress in that field--and also to adapt to the new financing world," Durand said, referring to the new regulations that are hitting banks worldwide and which will require them to hold a bigger cash buffer to cope with future financial trouble.
The Paris-based parent plans to shed EUR70 billion of risky assets and jobs 1,400 job cuts at its corporate and investment bank to meet with the new regulatory requirements. Durand said the bank's headcount in the Middle East remained unchanged.
BNP's Middle East business eyes growth across the board, including wealth management, fixed income, trade finance among others, but it is particularly keen on growing its presence in Saudi Arabia, Durand said.
"Saudi Arabia is a county where we want to participate in the opening of the capital markets. We want to play a role in the sukuk issues, we want to play a role in advisory and support our large corporate clients," Durand said.
Companies and governments in the Middle East sold $5.7 billion in sukuk in January alone, according to data from Dealogic, which includes a SAR15 billion issue by Saudi's General Authority of Civil Aviation.
BNP Paribas ranked 3rd in Dealogic's M&A tables for 2011 and 8th in its debt capital markets tables for the same period.
-By Nicolas Parasie, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
14-03-12 0936GMT
