BRED baking Pacific banking

Two portfolio investments in regional banks in Australia are now in the past for France's BRED banking cooperative, but it continues to look to the Pacific for opportunities.
 
Direct investment in Pacific challenger operations is one prop in a new regional strategy.

Although its holdings in Bendigo and Adelaide Bank and Bank of Queensland went by the wayside in 2013, BRED is a recent start-up in Fiji, a market with attractive banking margins. In the wider Pacific region, BRED bank has branches in New Caledonia (opened in 2006) and Vanuatu (opened in 2007).
 
The Pacific investments may provide BRED with an option for low cost supply into Australia, should the co-op's strategists ever look west once again.
 
Speaking to Banking Day in Suva, Frederic Reynaud, the chief executive officer of BRED Bank's Fiji subsidiary, said his market was very competitive, as six banks serve a country with less than one million people.
 
"Competition is there, but there is equally the potential for growth. Some people remain unbanked and others are simply looking out for competitive rates and service. That is where we fit in. We have to grow and take our share of the market," he said.
 
Reynaud said BRED Group had a strategy of diversifying into Pacific markets. "Fiji is considered the hub of the Pacific, with its unique and diversified business culture," he said.
 
"This was identified as an important part of our expansion plan into the Pacific region and presented us with an opportunity to bring to the Fijian market, and the South Pacific, a unique banking experience with a distinct taste of European flavour."
 
The bank opened its first Fiji branch in 2012 and after two years has more than 20,000 customers.
 
Reynaud said the bank has plans to expand by opening two more branches in two months' time and another towards the end of the year.
 
"The group is also looking for other opportunities in the Pacific. It's all part of the group's strategic plan; the banking industry is growing, opportunities are there."
 
The bank has yet to declare profits from its Fiji operations as it has just started.
 
"The margins are stable. We reduced our losses last year; the beginning of 2015 looks very good, and we are hoping to break even on the profit side. In a couple of years we expect some positive results."
 
Reynaud added that the last few months had picked up a growth trend that was a bit lower than expected, due to competition, but the last few months "have really picked up with an average of 800 new accounts per month from the three branches and loans increased by 40 per cent."
 
 Reynaud, who has worked in the banking industry for 20 years with the last ten years within BRED Group, said coming to Fiji was an opportunity and challenge that he could not have passed up.
 
"Growing a bank is a once in a lifetime opportunity. I have helped start up banks in other countries and to see a bank grow into a major bank is a privilege and experience."

The bank employs all local staff with the only foreigner being the CEO. Fifty per cent of the staff are female employees, with more going into managerial and executive positions.

While fairly new to the Pacific, the bank has over 36 million customers in Europe.

BRED is part of the BPCE group, the second largest banking group in France. It's a cooperative that operates in all areas of banking and insurance through two major networks and a variety of subsidiaries, including Natixis and Credit Foncier.

From May to July 2013, Cofibred, the holding company for the BRED group's equity interests, sold the securities it held in the Bank of Queensland and Bendigo and Adelaide Bank.

According to its 2013 annual report, these disposals generated capital gains of €28 million. The capital thus freed up will be reallocated to continuing the BRED group's strategic development, particularly at international level.