Interview: Natixis’ expansion in Africa
Hélène Karam, who has responsibility for Africa within the EMEA platform, presents the main facets of our development in Africa and also the key factors that should make us successful there.
How do you explain the current enthusiasm for Africa?
Hélène Karam: “Africa stands out in a number of ways. It is home to one-third of global mining reserves and has 25 percent of the world’s arable land, yet unexploited. It is experiencing strong demographic growth, giving it a very young population, and a middle class is emerging, so consumer spending is on the increase. Increasingly interconnected with other continents, it is relatively stable politically and is extending its services sector. In addition, it boasts significant forex reserves and, crucially, its growth rate is one of the highest in the world.
As a result, it is attracting high interest from the major economic and financial players1. The prospect of harnessing its rich raw material resources, of developing its infrastructure (which African countries are in dire need of) and investing in capital markets and increasing international trade is appealing to them.”
Where is Natixis present?
H.K.: “Natixis does not have a physical presence in Africa, save in Algeria and a Rep office in Egypt. That said, it has been active there for many years via four business lines— Global Energy & Commodities, Aviation, Export & Infrastructure, Global Transaction Banking and Fixed Income. In 2013, Natixis ranked among the first 10 global banks most active in structured financing in Africa2.
Natixis is not the only business of Groupe BPCE active in Africa. Through its network of local banks, BPCE International3 has established itself in around 10 countries in commercial banking activities complementing those of Natixis.”
What is the outlook for Natixis, and what are its development objectives?
H.K.: “The actual level will depend on the growth trend of the continent, which is highly vulnerable to ups and downs in the global economy and to variations in commodity prices.
To secure a sustained pace of growth in Africa, Natixis will continue to roll out its key franchises, while diversifying its activities and developing business lines that have currently a strong pipeline of deals and projects such as infrastructure finance or trade finance.
Natixis is also focusing on capital markets. We are seeing a number of African countries resorting to capital markets to serve their funding needs, such as Tunisia and Morocco which successfully launched bond issues arranged by Natixis, and some Sub-Saharan African countries are following suit.
Our expansion in Africa will, of course, be guided in support of our clients and partners, while accommodating specific local requirements.”
What are the key factors that will help us succeed?
H.K.: “In addition to our sector expertise and to our various dedicated teams, we have a broad base of international clients or prospective clients that are asking for support in Africa.
We are also well-equipped to continue investing in the continent thanks to our sophisticated risk management policy. The majority of the financing led by our business lines in Africa is either backed by a security package related to the underlying asset, or comprehensively covered by export credit agencies and private insurers, or supported by multilateral and bilateral funding institutions, or benefits from offshore payments or from risk transfer to international counterparties that are clients of Natixis.
We can also leverage BPCE International’s network of retail banks by building on their knowledge and local infrastructure, enabling us to offer our clients the most suitable products and services.”
1 Including over half of foreign direct investors since the 2008 crisis
2 Source: PFI-Thomson Reuters
3 BPCE International is the holding company overseeing Groupe BPCE’s international investments. It plans to continue expanding in Africa, especially in countries on the western side of the continent.
Facts and figures about Africa
(sources: IMF, African Development Bank, Deloitte on Africa 2014)