Natixis Corporate & Investment Banking (CIB) recently launched a five-year Asia Pacific (Apac) strategic plan for the period 2025 to 2030. Known as “Scale Up”, the plan is to grow a profitable platform through scaling its multi-expertise CIB model by leading in specialties across sectors, products, clients and cross-border transactions.
The plan includes serving the bank's parent firm Groupe BPCE through credit distribution, access to its Asian investor base, and supporting the group’s global clients. A spokesperson for the bank told FinanceAsia that Natixis CIB wants to remain agile as “it grows and scales up" requiring "a laser-focus on growth, selectivity in clients, projects, and continued profitability in development.”
Natixis CIB said it is intending to achieve this by looking at the mega-trends in Apac, such as the development of individual wealth, the infrastructure boom anticipated in the region, the growth of the middle class, technology and energy transitions, and stronger links with the Middle East.
It also wants to leverage its capabilities where they are the "most relevant" in Apac, with a focused geographic expansion in Japan and India.
See below for a recent interview with Bruno Le Saint, CEO, Natixis CIB, Apac, which first appeared in FinanceAsia's 2024 Volume Two of the magazine.
Natixis is becoming an increasing force in the Apac region under Le Saint who has spent the majority of his career at the bank, which is part of Groupe BPCE, the second largest banking group in France, and a global cooperative group.
Le Saint told FinanceAsia at Natixis CIB’s Apac headquarters in Hong Kong about his career at the French bank: “I have been at Natixis for almost 23 years – most of my career and mostly on the banking side. I have spent half my career in Asia and was first in charge of structured finance.” He had several high profile roles, including head of banking activities, Apac before taking up his current role in May 2020.
The bank has been around for just under 50 years in Asia, with the first office in Apac opened in Bangkok and the first branch in Singapore, since then, the bank has developed across the region, and it is still expanding.
The name Natixis (today Natixis CIB) came about as a merger in 2006 between Natexis and Ixis. Natexis was a financing and trade financing bank, with a focus on Shanghai and Southeast Asia (SEA), while Ixis was more market-orientated and was strong in Japan and Hong Kong.
On paper, the combination of the two was a great idea, but in practice, the 2008 financial crisis made it tough. After a restructuring in Europe in 2012, Natixis CIB asked itself what it wanted to do in Apac, and since then it has seen good growth in the region, Le Saint told FA.
He said: “We have been transitioning from a lending bank to an investment bank with a much bigger capital markets business. We are a hybrid animal between a pure investment bank and a commercial bank. We have a balance sheet that allows us to help clients until we find the right liquidity or funding solution for them. We aren’t the biggest CIB, but we work wisely. We deal with a diverse range of clients, including corporate and financial sponsors, asset managers, credit funds, life insurers, and more.”
Natixis’ Apac business makes up around 12-14% of the global business, depending on the quarter, year, and how other units are performing. It’s been growing at 8-10% over the last few years and it should keep that pace over the next few years, said Le Saint.
Covid challenge
During Covid-19, all banks had a myriad of issues, with those relying more on expats having a particularly tough time, especially in mainland China and Hong Kong where restrictions were sometimes harsher than most other countries, especially around international travel.
Le Saint said: “The pandemic was challenging for our people, but still good for our business as we developed significantly at that time. Our staff demonstrated an impressive level of commitment, dedication and hard work resulting in positive growth and further business diversification.”
“Our Apac platform is quite diverse, we have over 30 different nationalities across the region, and a few people were questioning if they were in the right place [during Covid-19], but we managed to keep our unique culture and business aligned as we have a strong culture and the executive committee is well aligned,” he continued.
Including Natixis’ affiliates, two M&A boutiques, the bank has over 1,000 staff in Apac. This headcount has more than doubled since Le Saint joined in 2012.
“The value we add to our clients comes from our multi-niche expertise and global network. We have in-depth sector knowledge of the client, and the type of transactions, such as cross-border. For this, you need the best talent with the right mindset,” he said.
“Despite the impact of the pandemic, we kept investing because we have a long-term view for the region which we believe has great potential, and we want to continue to grow our business,” he added.
Global markets
Natixis is keen to accelerate its development in global market activities.
Le Saint said: “We've made recent significant investments in Korea, and we expect to accelerate that across Apac, including Japan. We are across macro, equities, credit, commodities and more, and we want to keep growing the business.”
“All the sectors, products and activities offer a lot of potential. In global markets, we have a very large product offering and we need to accelerate and onboard clients in Japan, Korea, Hong Kong, mainland China, SEA, and Australia -- there's potential everywhere on the advisory and financing side. We want to continue accelerating our presence in sectors like renewables, telecoms, infrastructure, technology, healthcare, insurance, transportation, and aviation,” he continued.
Natixis is aiming to become a leader in each sector and is already one of the best banks in renewables in Apac, according to Le Saint. He said: “We have a very complete offering -- we can do M&A advisory, project financing, trade finance, access capital market private placement in the US, commodity hedging -- the full scope. We want to leverage our global capabilities, whether that be for a bond issuance, loan or another type of solution.”
For example, the bank can help Chinese clients buy in SEA, Australia, the Middle East, Latin America, the US, and Europe.
M&A
The M&A market has been tough globally in the last few years, with Apac no exception.
Le Saint acknowledged: “There is less M&A in the market at the moment – this is a difficulty that all the big players are facing. The M&A market is struggling in China. We are grappling with this too, but M&A is not our sole business in China as we have a diversified offering.”
He said Natixis is doing less than before, but “it’s manageable” and the bank is “investing into the business and capturing new transactions.”
In China, Natixis has a boutique partner, called Vermilion Partners, which its teams in Hong Kong and Singapore work closely with.
Explaining the strategy in the world’s second largest economy, he said: “We are leveraging the boutique M&A bank to take advantage of the rebound in Shanghai and Beijing. We are going to invest in China. Some banks are reducing their presence in China in the advisory space, but we are investing, because we see the long-term potential and there are still plenty of cross-border deals. There are also others who are selling in China, and those who want to reconsider the way they conduct their business in China; for this they need a good adviser and a bank like us.”
For example, recently with Vermilion it advised automaker Stellantis on its strategic global partnership with Leapmotor, a Chinese EV maker.
For clients who want to renegotiate their JV agreement in China or reconsider or farm out some equity they have in China, Le Saint feels the bank is “well positioned” to help and has execution capabilities in Shenzhen, Shanghai, and Beijing, on top of Hong Kong.
Selective approach
While the bank is gaining market share, Le Saint is keen to emphasise that Natixis is “not a universal bank”. He explained: “In Apac, there are plenty of things we don't do. We don't do cash management, or a lot of commercial banking. Therefore, we are selective with the business, the products, and the clients we deal with in our key sectors across Apac.”
There is also identifying which sectors and markets go together.
He said: “Renewables, infrastructure, healthcare are all sectors we are looking at in the region, but which don't have the same potential everywhere. Some sectors may have more potential in Thailand than Japan or in mainland China or in India. It's not the same in each market. Japan is more market-oriented. Australia is more banking and investment banking-oriented. Mainland China is more corporate and big banks. Taiwan is more life insurance and banks. In Singapore, it's corporate and financial sponsors or infrastructure sponsors.”
“We don't compete for market share; we compete for value-added transactions with the right client in our area of expertise. We also want to build long-term relationships,” he continued.
Le Saint suggested: “Universal banks risk being average on every product.”
Explaining the approach further, he said: “We adapt to client needs. When I was calling clients 10 years ago, I had to explain who we were, however, we are now well-known in our key sectors. They know our expertise and what we are capable of. And some non-clients are calling us -- they've seen what we have done and want to work with us.”
However, Le Saint noted there is a still a lot of hard work ahead. He said: “In the sectors where we play, we can still be better known. The brand needs to work to get our name out there.”
Market trends
Le Saint cited several key recent market trends, including private equity and infra funds asking for back leverage as they need to handle the yield, and return money to their LPs.
Another trend is listings. He said: “We see some clients with global businesses listed in the wrong place that are not well valued by the market, and they need a bank to help them delist and potentially relist elsewhere.”
With the dollar being so strong, FX is another important subject. Le Saint explained: “We see more client demand for local currencies, because the dollar is expensive. While we don’t have a local bank everywhere, we try and help. Some clients might prefer to borrow in Renminbi rather than USD, for a loan or a bond, because it’s cheaper, and then you swap, or borrow in the currency that is cheaper. For example, clients are asking for pricing in yen because the yen is cheap compared to the dollar, and then you swap back into your local currency.”
With large investors less keen to buy risky or complex assets because they can buy USD paper at 4% today, there is less desire to pick up complexity.
Another trend is the Middle East and Asia building closer ties. He said: “It's something new and wasn’t like that 10 years ago. We have a strong presence in the Middle East, a region which we work closely with, and want to capture the investment flows.”
“For example, there is a solar farm in the Middle East using Chinese solar panel exporters. It can be Middle East investors buying into infrastructure assets, for example, a water treatment plant in China. It's both sides and we don't want to be outside of this,” he said.
“The good thing about Natixis CIB is that we are a mid-sized corporate and investment bank. We know each other very well, whether that’s in the Middle East, the US, Latin America or Europe. It’s easy to reach out and work together,” Le Saint said.
The bank can deal with most markets in Apac, even where it doesn’t have a presence such as New Zealand, the Philippines and Macau, if, regulatory wise, it is allowed to come from offshore. Sometimes, it partners with local banks or local boutiques, depending on the type of work."
This flexible approach works across most of the region, however, for some Asian markets, such as Pakistan or Bangladesh, the bank doesn’t “have much risk appetite”, Le Saint said.
India is not a country where Natixis CIB has had a large presence, but is on the bank’s radar. Le Saint said: “We have organised ourselves better to cover India from offshore and we have a representative office in Mumbai.” He added: “India is becoming an unavoidable market, so we want to be able to cover India better and we are looking at how best to expand. We are exploring an on-the-ground presence; we don’t want to miss out.”
Sustainability
Apac is seeing an increase in awareness around the importance of mitigating climate change.
As part of Groupe BPCE, Le Saint said that the “long-term impact of everything we do matters” which informs how it conducts business.
He said: “At the heart of everything we do is environmental, social, and technological transition; helping our clients in their transitions is huge, and we have stringent rules and strong advisory capabilities. We look at everything: the carbon impact of every loan we extend: the environmental impact, the social impact, the governance impact.”
“For those who are not transitioning fast enough or are not serious enough, we might not take on, but we may onboard clients if they're serious about transition and need help,” he warned.
For sustainability-linked loans, Le Saint said it is “about understanding the strategy”. He added: “Before we put any financing together, we look at the portfolio of assets or activities in the business. For example, what is the firm’s trajectory in terms of carbon footprint? What does it mean by 2030 or 2040? Can we help them sell assets or help with the transition of assets?”
One recent large transaction Natixis worked on was a syndicated loan for the EV manufacturer Polestar, a subsidiary of Chinese tech group Geely Holding. Le Saint explained the bank is “very close to Geely” and likes “their transition story”.
In another recent deal in New Zealand, Natixis closed the first nature-based carbon credit facility in Apac with a leading trading house. The underlying assets are composed of several forests in New Zealand, which are expected to sequestrate more than 1.75 million tonnes of CO2 from the atmosphere over the next 14 years – thus playing a critical role in reaching New Zealand’s net zero undertaking for the Paris Agreement.
Expect plenty more transactions ahead to come from the French group as it wins more clients across Apac.
