Banking Sector in Ivory Coast: Philosophy of BICICI

Interview with Jean-Louis Menann-Kouame, Chief Executive Officer of BICICI (BNP Paribas Group)

Regarding your BICICI international policy, there are several things you want to implement. Can you talk about wanting to provide home loans for the Ivorian diaspora abroad?

We participated in the most recent “Diaspora for Growth” forum, organised by the Ivorian authorities. We understand that one of the strong wishes expressed by the Ivorians across the diaspora is to benefit from housing in Ivory Coast, so that they will be able to live here one day when they decide to return to their country of origin.

We think that establishing a policy dedicated to this population is one of the things that could work. The idea is to identify Ivorian executives working in companies in Europe, the United States, the sub region, who have evidence of a regular salary and a work contract in due form. The idea is to help these executives by providing them with a home loan in CFA for Ivory Coast, which would be reimbursed either by rental income, or with a portion of their foreign earnings. The idea is to target these customers; we believe in it, it’s what we are working on.

Regarding your international policy, is there anything else you want to add in terms of products or services?

There are Ivorian companies which are connected to foreign countries for import or export operations in general. As you know, Ivory Coast is the largest cocoa producer, we have cocoa exporting customers and we support these customers in the same way we support large importers of goods and services. If you think we have a strong international trade department you would be right. We have a “trade finance” department that resolutely supports customers, with a perfect mastery of international trade techniques, and which is very active in the support of this customer segment.

We can now clearly display the fact that we are the leading bank on the local market for the financing of international trade activities.

What is your strategy, what do you want to establish, what do you want in terms of rankings?

First, while supporting the Ivorian economy which is rather well oriented, we shall remain very vigilant as far as our approach to credit risk is concerned. This is fundamental, as it is in BNP Paribas’s DNA.

The second important point is the notion of respecting rules established in the financial market, which is being developed regionally and internationally with a regulator who is very present in establishing rules for new procedures, including compliance, one of the pillars of stability of our group and subsidiary in Ivory Coast. Working in compliance with rules is very important for us; we spend a lot of time training our associates on the subject.

There is also business, for us it is centred on customer satisfaction. It may seem to be a misconception or it may seem trivial, but for us it is the only condition to ensure the sustainability of our revenue. Today we have 25 banks in Ivory Coast, those that make a difference don’t just sell the products, but know how to sell the products to ever more demanding customers. The population is getting younger, it is more and more educated and because of that it is more and more demanding. And we want to meet the needs of these demanding customers.

Finally, Ivory Coast is a country that has experienced 3 years of relatively strong economic growth and which seems to be establishing habits, so we are currently living through a golden page in the history of Ivory Coast and we want to be close to business and entities that bring investment opportunities and development projects (and that is happening more often). We have to identify them and introduce them to our panoply of products and services, and together we will work with our associates to be connected to these important deals that are happening across Ivory Coast today.

What makes that you different from other banks?

You quoted products, such as factoring, advanced payment, furniture leasing and soon real estate leasing, I spoke of the cocoa industry earlier, through supporting these customers with our “Soft Commodities” department, we do have products that you can find in other banks, and it’s good that you can find these products in other banks. It is important to know that with very high quality, well trained human resources, and above all by being backed by a group like BNP Paribas, where we profit from expertise in France, we profit from this expertise here in Ivory Coast too, we can claim to offer the best services to our customers.

Now there is the issue of pricing, i.e. pricing is becoming more and more of an important comparative element for our customers. The idea, I tell my teams this often, is that we are in a very competitive market, be very attentive to pricing, we are competitive, because we are confident of the quality of our products, then we have to sell them. We will put more emphasis on adequate pricing to make us a powerful bank which offers quality service, but also a competitive bank with a researched rates package which takes into account the realities of our market and the capability of our customers.

Let’s talk about your experience in the finance sector. Tell us about high-end customers and what you want to establish regarding that.

First it must be said that the regional financial market in its existing configuration, which dates back to the end of the 1990s, has been very interesting and dynamic. The BRVM (the Regional Securities Stock Exchange) today holds a place of honour in the market. We also have a regulator which is the Regional Board of Financial Markets who plays its role rigorously and seriously, all this has contributed to the emergence of a high quality financial sector with a very good reputation.

BICIBOURSE, our baby, operates within this financial centre, which today is one of the most dynamic management and intermediation companies in the UEMOA area, and as BICIBOURSE shareholders, we want to work in perfect synergy, or in any case to develop potential synergies with our subsidiary, in what I call supporting our high-end customers in their knowledge of and participation in the stock exchange. We believe that a better synergy between our high-end customer managers and BICIBOURSE would allow our network of agencies to be better aware of the investment opportunities that exist in the financial market and to be able to offer those opportunities to our high-end customers. These people want this type of service. Today, we have the expertise to do this. In fact, it works on a flow of information, a further synergy between our BICIBOURSE subsidiary and our network of agencies to achieve this objective to disseminate information, to advise and to involve our high-end customers as financial market players, by buying, and by selling shares and bonds that we suggest to them.

What is your vision for to the future concentration of the banking market?

The Central Bank has just decided a few days ago that the minimum capital of banks in the UEMOA has to be increased from 5 to 10 billion CFA francs by December 31st 2017. It is an obligation which applies to all banks in the sector, and it is a rather good thing. But, when we look at the level of equity in general, of banks, for example in Ivory Coast, but this is an example that can be extended to other UEMOA countries, we realise that this level is rather low compared to the countries’ ambitions, displayed by the strong economic growth of the GDP, there is a discrepancy between these ambitions and the banks’ equity which does not allow for the long term support of the region’s treasurer.

For Ivory Coast that’s an 8 to 9% growth that should last for a few years, but I think that we, the Central Bank and regional authorities, should make more efforts to further strengthen banks’ equity, so that we have the real capacity to support the economy. With the equity levels we have today this support, in my opinion, will be limited and it’s a shame.

If such a decision is made, if the regulator asks, for example, the banks to surpass 10 billion, and this decision will apply to all banking operators, this could eventually lead to some concentration movements.

But we are not there yet, the deadline of the end of 2017 has only just been set, in my opinion it will be towards the end of the current decade and beginning of the next decade that we will see any changes. I think it’s good that the authorities are addressing the issue.

You mentioned the growth of Ivory Coast, the country has had an impressive turnover for 4 years now, are you confident for future growth at the same pace?

Yes, very clearly and for several reasons. Ivory Coast has the essentials. President Houphouët-Boigny gave this country a solid base we can build on, future generations will build on it too. Indeed, if this base did not exist, this country would have been faced with great difficulty during the first decade of the 2000s, when, as you know, we suffered from a severe crisis. But we got through it, the simple example is that civil servants’ salaries were regularly paid until the end. The base exists. Over the last 3 years, we have seen government action and economic development-friendly dismemberments and the numbers don’t lie, as today we are at a relatively high growth rate.

For Ivory Coast that’s an 8 to 9% growth that should last for a few years, but I think that we, the Central Bank and regional authorities, should make more efforts to further strengthen banks’ equity, so that we have the real capacity to support the economy.

The willingness of the Government, as it is displayed today, seems to suggest that this trend will continue over the next few years. The direct consequence of this is that we are witnessing the return of investors who had left the area, and we are witnessing an intake of investors who were not previously interested in this part of the world. Today, we have become a true relay of growth for some international investors and this, in my opinion, should help to ensure stability and economic growth in the coming years. I believe in the country’s economic growth, in the future, or by any means in the mid-term.

I would add that Ivorians have a generally solid academic training. We now have good quality human resources, working in different companies throughout the country and we have an administration that is rather well organized.

The combined effect of all this should enable us to ensure political stability, which is important, and at the same time economic growth over the coming years. That’s the analysis we can make today.

Looking ahead mid-term, 2 to 3 years, if you succeed in achieving all your goals, what will BICICI become?

In 2 or 3 years, I hope BICICI will be a bank that will be able to establish a group of agencies across the country. I hope that it can be cited as a leading bank, or even better, the preferred bank of international customers coming to Ivory Coast, but also for Ivorian companies carrying out interesting work in their respective industries.

We also hope that in 2 to 3 years time, we can be a leading bank for real estate financing, which is expensive on Ivory Coast, the purchase of real estate has become a priority for many executives and we want to be alongside them in the realisation of such projects.

And in 2 or 3 years, I hope that when we carry out customer satisfaction surveys, we will be known as a bank that knows how to put customer satisfaction at the heart of its priorities. We would like to be cited as a bank who knows how to welcome customers, both in agencies and business centres, and I am hopeful that we will achieve this. We have the means.