Vitalo: “It’s not going to be a ‘wow’ year but a decent year”
Zawya Dow Jones/Doha

Barclays expects 2012 to be a “decent” year for bond and sukuk issuance in the Middle East, likely on par with 2011, but is more upbeat long term as regional companies shun under pressure European banks in favour of other sources of debt, the UK lender’s regional chief executive said yesterday.
“It’s not going to be a ‘wow’ year but a decent year,” said John Vitalo, Barclays Middle East and North Africa chief executive, in reference to the performance of the region’s debt markets this year.
In an interview with Zawya Dow Jones, Vitalo said the longer term outlook for bond issuance in the region was good as European banks-traditionally large lenders to the Middle East-struggle with a crippling debt crisis, forcing local companies to look at alternative ways of raising money through conventional and Islamic bonds, or sukuk.
Middle East capital markets have benefited from a revival of global risk appetite and the high credit standing of many Arab Gulf issuers at a time when some investors are shunning European debt.
Standard Chartered predicted last week that bond issuance in the Middle East could rise to $40bn in 2012, up from $26bn in 2011.
Emirates NBD and QNB have already tapped the markets this year, and other banks are expected to issue bonds later in 2012.
“The [deal] pipeline is good,” Vitalo said, declining to say how many bond transactions the bank expected to complete this year.
Barclays’ risk management business in the Middle East such as foreign currency and interest rate risk has “picked up” in the last year, reflecting a worsening global economic outlook, the CEO said.
There was “increased demand for risk management” in times of volatility with companies, governments, sovereign wealth funds and investors all looking at ways of hedging risk, Vitalo added.
Barclays is also eyeing regional expansion.
“We see opportunities in the region for growth for Barclays across pretty much every business we look at,” he said.
Regionally, Barclays’ core business lines include corporate, investment and retail banking, along with wealth and investment management.
Earlier yesterday, Qatar signed an asset management deal with a private equity unit of UK-based Barclays, an agreement that will see the Gulf country co-invest $250mn, and one that reflects its broader push into commodities investing.