GCC is one of the key focus regions for BNP Paribas, a European leader in global banking and financial services. The bank, termed one of the six strongest banks in the world by Standard & Poor's, continued to expand in this region and even recruited more staff.
Jean Christophe Durand, Managing Director of BNP Paribas in the GCC, says the region holds immense business opportunities that BNP is tapping into. The bank also relocated some of its staff from Europe to this region. "We have been recruiting in the region. We have been adding staff and expertise to the current set up, and currently have about 725 employees from very diverse backgrounds, and with more than 42 nationalities. In 2009, we recruited 80 people," Durand told Emirates Business in an interview.
In the GCC, it focuses on asset management and services and corporate and investment banking.
How was the performance of BNP Paribas in 2009 as financial sector took a hit due to the global crisis?
In terms of revenue, 2009 was a very strong year for BNP Paribas globally. Business was brisk and good. There was inertia of larger projects, oil prices were still at reasonable levels which enabled us to continue our development.
Having said that, we have had some concerns about credit risk and financial crisis in the region.
Was it as good for the UAE? Can you share the results?
The UAE is a region that is strategic for our group. Internally we do have separate results for it but we don't publish these, as they are local, and we only publish global results quarterly. All I can say is 2009 was a great year for us in terms of revenues.
What are the challenges you foresee this year?
In 2009, there was different situations and cases in different countries. The challenge, I think, is to maintain for the coming months the presence of banking sector at the levels it was before. But banks are looking at restructuring. Yes, projects are still there. Liquidity for these projects is unlikely to be an issue. However, on the financing side, banks would be much more cautious if not shy in the coming months.
Liquidity provided by the banks is based on perception of risk. I think perception of risk in the region has increased.
And by when do you see this risk perception reduce?
We believe in the GCC, and it is one of the bank's strategic regions. Large developments, oil-based economies and I think a lot of large projects have started. This will continue. But to regain full confidence and position that was prevailing a year ago, in my view, will take at least six months.
I think first six months would be challenging. Even the banks that are strongly committed to the region will really concentrate on big and less risky projects. So you would see less credit appetite. I am optimistic that things will get better by the second half of 2010
What is your strategy when it comes to exposures?
We take exposure on clients who are doing extremely well. But some of the top ones, too, are affected by the crisis. When I say we are more selective, it's not only a question of names but also how these companies are doing. We have internal credit ratings and risk management. In the region, we have large teams. We have our own systems in terms of grading.
What are your target customer segments in the GCC?
GCC is one of the regions in the world where we have most comprehensive set up. We target large institutions, corporations, governments and investors. We also serve high-net-worth and ultra-high-net-worth individuals through its wealth management team. Investment banking is the largest part and also mid cap corporate banking. We are not into retail, like we are in Europe.
GCC being one of your key focus regions, what are your expansion plans for this region?
We have been expanding over the past five years, we opened branches in Riyadh and Kuwait, we got CMA licence last year, we are hoping to get Qatar Financial Centre licence this year. We also started new businesses such as private equity in the GCC. We have branches in five of the six countries in GCC, two in UAE. The UAE also has sub branches.
When it comes to expansion, it is not just opening new branches; it could be relocating businesses from Europe. For example, in 2009 we relocated businesses from Europe; one of them is cash management, so we now have cash management capability for large customers which is based in Bahrain. We also relocated custody teams. So we continuously, when justified, relocate teams in the region.
At a time when the finance sector has been witnessing job losses, how were things with BNP Paribas?
We have been recruiting in the region, in 2009. We have been adding staff and expertise to the current set-up, and currently have about 725 employees from very diverse backgrounds – with more than 42 nationalities.
PROFILE: Jean Christophe Durand Managing Director, BNP Paribas in GCC
Durand is entrusted with overseeing the bank's operations and strengthening its presence across the region.
He has been with BNP Paribas since 1996. He oversees the bank's GCC operations and manages a team of 670 employees.
Earlier he held several senior positions at Banque Indosuez in Bahrain, Kenya and London. A French national, Durand advocates Bahrain as a regional financial centre due to its quality of life, openness and and proximity to other Gulf countries.
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