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Société Générale, a bank committed to Africa

Interview - May 13, 2015

SGBGE has been accompanying Equatorial Guinea’s growth for decades and plans to continue doing so in this new economic reality


Equatorial Guinea is experiencing one of the most prosperous times of its history. What makes Equatorial Guinea more competitive when compared to other countries in the region?

Equatorial Guinea’s competitive advantage is its capacity to refine crude oil, particularly after the discovery of oil deposits in the country. The main difference between Equatorial Guinea and other African countries that have oil as well is that Equatorial Guinea has analyzed what the best way of using this resource is and what type of investment in infrastructure was needed. The first stage of this process ended in a timely manner and with exemplary infrastructure when compared to other African countries.

Equatorial Guinea's advantages come from its raw materials. Mainly oil, which has overshadowed the rest and has been the economy’s motor in the last few years. However, oil is not the only natural resource the country has; it was not in the past and will not be in the future.

After all the efforts made regarding infrastructure, the country is now focusing on diversifying its economy. How will the banking sector collaborate with diversifying the economy and reducing the dependence on imports?

The stage we are at depends on the country's future, which is probably the case for all nations that strongly depend on oil. Oil is a complex and lasting resource, but sometimes causes a lack of interest in other industries. Equatorial Guinea has always had the intention to diversify its economy, and there is no reason why it cannot do it, given the level of infrastructure it now has.

In the past few years, the banking sector’s role has been backing the companies that were dedicated to building the country up. The banking system provided cash advances as companies needed them, and in return expected a payment commission from the State.

With the current diversification of the economy, the projects have become more complex, and so has the funding. We are not talking about cash advances anymore, but about analyzing projects’ viability. The time when the state funded the totality of the projects has ended. Nowadays, the companies and banks interested in investing in Equatorial Guinea need to bear the risks and to fund the projects themselves. We are not used to this type of funding, since the State had been shouldering all the weight up until now.

According to speakers at the Economic Diversification Symposium, Equatorial Guinea has the demand and the capacity to become Central Africa’s major financial center. What is Equatorial Guinea’s financial market like and what opportunities do financial services offer today?

To my understanding, Equatorial Guinea's financial sector is quite diverse. This is good, healthy, since each bank has a different situation, different strategies and investment horizons. There are also differences in the origins: some banks are national, some are regional, and some are international, like Société Générale, which I consider a truly international bank and an added value for Equatorial Guinea.

The different banks' situations vary, and this is healthy. In the case of SGBGE, we have been rather selective when it comes to investing. We have an appetite for risk and wish to continue like this. We are 100% committed to the country and intend to keep being so. We invest on stable companies that really add value to the country.

The Minister of Finance stated that it is very important to train the financial sector’s staff, and that by 2018 there will already be one generation of qualified employees. Which do you think are the current training requirements in the financial sector?

Workforce training is a recurrent topic, and it should keep being so. It is very important for banks and companies to tackle this issue, as the future and sustainability of the banking system in Equatorial Guinea depends on having skilled labor.

In the case of Société Générale, both at the Group and the local levels, we take the qualification of our employees quite seriously. They either train within the bank, or study abroad. The idea is to continue improving the training of our employees, for which we have increased 2015’s budget.

The company also manages African talents. This initiative started many years ago here at Société Générale, and aims at identifying local contributors of our African subsidiaries. The idea is that one day these local collaborators become the head of the African subsidiaries.

Société Générale is one of the first banks in Equatorial Guinea, having settled here in 1998. What landmarks have you achieved since?

The country has gone a long way since 1998, about the time when hydrocarbon exploitation began, and much has changed in this country from then on. The most important thing is that Société has been in the country during the whole process. This adds steadiness and expertise, which is a considerable added value for us.

We have always been eager to contribute with our knowledge in finance and international trade –imports are quite relevant for Equatorial Guinea–, from providing international money transfers to financial support. SGBGE wishes to continue providing funding for large projects that will generate both value added and diversification of the economy.

As you mentioned, SGBGE is part of Société Générale, a worldwide well-known institution. What role does SGBGE play in the Group and how does it benefit from the synergies?

SGBGE fits right away into the Group, as Société Générale has always been very committed to Africa. We have a presence in 18 different countries, with over 1,000 agencies in African territory and 50-70 new agencies opening each year. For example, we have recently opened a bank in Togo and purchased a majority stake in Mozambique.

This bank is at home in Africa. We have more than 11,000 employees and over 3,000,000 clients, and Equatorial Guinea fits perfectly into this. Not only does it fit into the African structure but also into the CEMAC –Communauté Économique & Monétaire de l'Afrique Centrale–, where we have usually been a liquid bank with great capacity to collect deposits. This has allowed us to provide aid to other banks in the region when they needed it, and to participate in syndicated loans as well.

Thus, SGBGE is a strategic member of Société Générale, as it is a solid bank –from a financial standpoint–, very selective when it comes to credit risk. We strive to guarantee our sustainability and profitability for our stockholders.

What other services do you offer to the corporative customer, and what makes you stand out between the different Guinean banking options?

Société Générale’s business proposal is the same worldwide. Any international company used to multinational services can expect the same benefits in Equatorial Guinea. This means that if companies want to invest in Equatorial Guinea, they can feel confident there is a bank like any they could find in Europe or another African country.

That is our best presentation card: we belong to Société Génerale and we will live up to international standards. As I have stated before, we offer services that have a support system based in Paris and other financial centers such as London.

The bank wants to be involved with Africa, as it has been creating pooling centers in the continent for over a decade, where we seize the synergies created between subsidiaries in order to share financial services, auditing, informatics, credit cards.

We are the only bank in Equatorial Guinea that provides services to Visa, Mastercard and Union Pay credit cards. We are the only bank in Equatorial Guinea that can actually provide the terminals necessary to pay with those credit cards in local hotels and businesses.

We are trying, to the full extent of our capacity, to modernize the country and make it less dependent on cash. Cash is hard to manage, for both commercial businesses as well as banks. We want businesses to keep an open mind and consider options that are much more effective than cash, and that have already been tried in other countries.

A similar situation occurs with online banking and cell phones. We want to be accessible to our customers, make their lives easier. For example, not have to deal with bank branches overflowing with people on payday. We want the customer to have different options than to have to go to the bank in person.

In what ways are you promoting and supporting the creation of SMEs so that Guineans can start their own businesses?

In the past few years, our support to SMEs has been comprehensive: we are there since the beginning. From the moment an SME starts, we provide assessment and help in preparing their financial statements. We help SMEs draw the papers necessary to apply for a loan: what their credit folders should contain, what type of information to facilitate, and where to get it.

SMEs is a complex sector, hard to standardize, but we are very interested in it. Our bank has a dominant presence with small and medium businesses, and we are committed to them. The SME sector is the future of every country. In Africa, SMEs play a strategic role. If you are there for them since the beginning, they do not forget when they become big companies.

Do you have a reassuring message regarding the Equatorial-Guinean economy?

The message is clear, all one has to do is to compare Equatorial Guinea to other economies. It is true that, in the last years, the country's main resource has been crude oil. Plummeting international prices have led to readjustment and even reconsidering the financing horizon of some projects, as it is common when resources become limited. However, the country's economy is sound, because the State practically has no foreign debt. Other countries have already used up foreign debt, but Equatorial Guinea has not.

Equatorial Guinea has both the capacity and the infrastructure to obtain foreign funding not only through the banking system or through international financial agencies, but also by issuing sovereign debt. Other countries do not have this chance anymore.

The country's main advantages are the steadiness that comes from not having any foreign debt, its strategic geographical location –a gateway to Central Africa– and an abundance of natural resources.