Natixis Corporate and Investment Banking expects at least 10 per cent growth in its broader Middle East business next year, despite the Iran war and contracting economies unsettling the region. The French lender plans to hire more bankers and expand in the UAE and Saudi Arabia. For Natixis, uncertainty also creates an opportunity to gain market share.
Bruno Le Saint, chief executive of Natixis CIB for Asia Pacific and Middle East, said the bank aims to maintain double-digit growth across the region. “In the overall region, we want to grow in double digits on average. This is what we've been doing over the past years and going forward we'll keep that pace,” he told The National. Natixis hopes to approach 20 per cent growth “in the next two to four years,” he said, depending on how quickly the rest of its business grows.
Growth Plans Amid Contraction
The World Bank forecast that Gulf economies would contract by an average of 4.3 per cent this year, cutting its April forecast by 5.7 percentage points. The International Monetary Fund also expected the region’s oil-rich economies to contract this year before a strong recovery next year, if shipping operations return to normal, managing director Kristalina Georgieva said.
The Iran war began on February 28. All-out hostilities halted in early April, but several attempts to reach a permanent agreement to end the conflict have failed. Le Saint said Natixis might reconsider its outlook if the conflict continued for two to three years. For now, he remains “very optimistic” about growth of at least 10 per cent over the next year.
“Even though some economies in the region, from a GDP perspective, are contracting, we have not yet reached our natural market share,” he said. A contracting market makes reaching that share harder, he acknowledged, but argued that the bank’s franchise and expertise fit client needs. “We are expanding, we are investing, so we are capturing market share at a time where not everyone has full attention on growing the business here,” he said.
Banking Across Borders
Natixis CIB operates from the Dubai International Financial Centre, where 80 personnel work. The Paris-based company plans to add staff and capabilities on the ground. It also wants to expand in Saudi Arabia, where it operates through Natixis Saudi Arabia Investment Company. “We still think that we are underinvested in Saudi Arabia,” Le Saint said.
Saudi Arabia’s Vision 2030 agenda fits the bank’s financing and investment-banking expertise in telecoms, energy, infrastructure, metals and mining. Natixis is also weighing an expansion into Turkey, which Le Saint called “a big economy in the region.” He said the possibility remains “under exploration for now.”
Regional debt-capital-market deal volume fell by about 10 per cent this year. Le Saint described the market as “relatively resilient”: borrowers were reluctant to tap markets because yields and rates were too high, not because liquidity was unavailable. Some borrowers can wait, turn to other funding options or use their own liquidity. “I don't think that our clients are in any stress to find liquidity,” he said.
Le Saint also said Chinese banks had returned to the region and were investing heavily, particularly to support the flow of energy to China. Natixis CIB combines its Asia and Middle East operations, and that platform accounts for more than 15 per cent of the bank’s overall business. The bank wants to lift that share to 20 per cent or more, drawing on its links across both regions to connect investors, capital seekers and capital providers.
Natixis is marking its 20th anniversary and has operated from the Dubai International Financial Centre for two decades. Its plan is to expand while regional forecasts point to contraction and the conflict’s duration remains uncertain. The bank’s measure of that uncertainty isn’t withdrawal; it is how much more business it can capture.