Banque Indosuez is to devote more resources to its Middle East operations, as part of a restructuring intended to create an international integrated investment bank. The announcement that the bank will refocus its efforts on its traditional markets, which include the Far East, was made after the new board of directors met in Paris on 26 January.
To underline the new strategy, chairman Christian Maurin is to make his first visit to the region at the beginning of February, less than a month after being appointed to the post.
The news will reassure the bank’s Arab shareholders, who feared Banque Indosuez might reduce its Middle East focus when the holding company faced financial difficulties last summer. At the time, Compagnie de Suez faced the prospect of a hostile takeover after announcing losses of almost $1,000 million.
The main Arab shareholders in Suez group are Lebanese Prime Minister Rafiq Hariri and the Kuwait Investment Authority (MEED 30:6:95).
As part of the restructuring, Indosuez will sell its 75 per cent stake in the UK fund manager Gartmore. Some of the proceeds are expected to be used to increase the bank’s Middle East operations, rather than being ploughed back into the parent company to help cover the Suez losses. Operations outside the bank’s core distribution areas will be reduced.
The bank’s biggest investments in the region are in Saudi Arabia, where it has a 31 per cent stake in and technical service agreement with Al Bank Al Saudi Al Fransi, and Lebanon, where it has a 51 per cent stake in Banque Libano Francaise and a 60 per cent stake in the recently established financial services company Indosuez Capital Moyen Orient. The bank has an offshore unit in Bahrain and branches in Dubai and Abu Dhabi. In Egypt and Iran Indosuez has representative offices. The Paris-based Banque Francaise de l’Orient is 40 per cent owned by Indosuez, with a further 25 per cent owned by Al Fransi bank.
The bank now has five branches in Yemen, after its fifth branch was officially opened in January in Mukalla, a coastal town on the Indian Ocean. Indosuez has the largest network of any foreign bank in the country, and plans to add a further two or three branches to this network in the near future.