Societe Generale returns to Australia

“We decided we had outgrown the model we had in place,” he said.

“Hong Kong is three hours away and without a banking licence there are constraints on the ability to go out and proactively market [for business].”

Societe Generale country head Pascal Sefrin, who moved to Sydney from Hong Kong three weeks ago, said the bank wanted more exposure to Asia’s growing markets.

“There are a number of growing emerging markets in the region but to have Australia in the mix is extremely important,” he said.

Vibrant sector

Mr Swift said the bank was lured to Australia partly by a vibrant renewable energy sector. “We know we will have a strong pipeline for years to come. This is not short term. It is something Australia needs to build,” he said.

Despite the political rhetoric, there has been “relative stability” in the government’s support, he said. “There is clear direction – and we have put in the appropriate structures to allow our clients to develop green alternatives in a way that is economically rational.”

Among Societe Generale’s clients are French-listed renewable energy company Neoen, which hosts Tesla’s big battery at its Hornsdale wind farm in South Australia and is among the most active players in Australian renewable energy projects.

In fact, Australia was a key driver behind Neoen’s impressive revenue growth in the last year. French energy companies Engie and Total Eren are also big investors in Australian renewable energy projects.

Societe Generale’s clients include renewable energy company Neoen, which hosts Tesla’s big battery at its Hornsdale wind farm in South Australia.  David Mariuz

While Societe Generale sees a strong pipeline of lending opportunities and believes its experience in financing renewable energy projects in Europe gives it a competitive edge over Australian banks, there is strong competition to provide financing, which has made pricing competitive.

Multibillion-dollar projects, such as offshore wind developments in Taiwan, have attracted headlines, but in Australia deals are smaller, at about $100 million to $200 million, albeit more numerous.

“In Australia they have tended to be smaller individual deals so perhaps a little under the radar,” Mr Sefrin said.

In addition to renewable energy, the bank has expertise in metals and mining finance and infrastructure, and believes there are opportunities in privatisations of energy and land registry assets. It is also eyeing opportunities from infrastructure privatisations, such as electricity grids and land registry sales.

Increasing activity

Mr Sefrin said the bank will plan to increase its activity in Australia’s debt capital markets while managing offshore raisings.

Societe Generale was an arranger of a euro-denominated bond issued by Sydney Airport last year, as well as a bond sale conducted by Toyota’s Australian financing division.

Societe Generale previously operated as an authorised deposit-taking institution in Australia. In the lead-up to the global financial crisis, “SocGen‚ had an operation of more than 300 people and was among the key players in the securitisation market providing financing to mortgage lenders and specialist financiers.

Former Australian Securities and Investments Commission chairman Greg Medcraft was the global head of Societe Generale’s securitisation business.

But the bank decided to scale back its operations in 2007 before giving up its licence in 2013.

Societe Generale stressed it had no intention of setting up retail operations to take deposits and, while it was looking to drum up securitisation business in asset-backed securities, it was not targeting mortgages.

“I don’t think we have the pretensions to be the size we were,” Mr Swift said.

Societe Generale is a big supporter of rugby union. It is the sponsor of the Rugby World Cup to be held in Japan this year, and is also a sponsor of Sydney rugby union club Easts.

Source link Finance News Australia

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