Interview with Kevin Salerno
Intesa Sanpaolo is the only Italian bank with a presence in Australia and is enjoying success in infrastructure and M&A deals despite COVID-19.
The corporate branch of Intesa Sanpaolo opened in Sydney in the first half of 2021, making it the only Italian bank with a presence in Australia.
Previously, any business done in Sydney was conducted from Hong Kong. The opening of the Australian branch – which currently has 12 staff and reports to the Hong Kong Hub – is part of Intesa Sanpaolo’s overall international development plan, and a meaningful development for the Bank’s presence in the Asia-Pacific area.
The Sydney branch is focused on commercial lending and wholesale banking – particularly on infrastructure and energy, syndicated finance and bilaterals, with an emphasis on large corporate mergers and acquisitions (M&A). The Sydney branch will allow Intesa Sanpaolo to support Italian companies in their international expansion and intensify support for international operators in the Australian market.
General Manager Kevin Salerno explains: “We don't just focus on Italian clients or European clients. We're also a major banker to local clients in Australia, as well as other nationalities.”
" I always explain to our sponsors and competitors that we’re not just buying assets, we’re actually the underwriter, arranger and structurer of these high-value interactions."
Kevin Salerno, head of Intesa Sanpaolo's Sydney Branch
Some of these key clients include Webuild (formerly Salini), CIMIC (ACS of Madrid) and Ghella together with a number of Australian fund companies such as Macquarie Infrastructure and Real Assets (MIRA) and Canadian pension fund Ontario Teachers.
Intesa Sanpaolo has been doing business in Australia for two decades – but not having a presence in the country meant it was excluded from a number of opportunities. “When we looked at the pipeline, the opportunities and our skill set, it made absolute sense to open a branch,” says Salerno.
Australia is in need of more infrastructure, he adds: “A lot of our European clients are leaders in infrastructure. Webuild, for example, is building the country's largest hydroelectric station in New South Wales.
“That same hydroelectric project in the 1940s necessitated Australia sourcing skilled European technology and migrants. And here we are, in 2021, using European engineering to double its capacity.”
These projects are key to economic growth. In fact, says Salerno: “Australia's gone really well through COVID-19.” It is reopening its international border and remains a triple-A-rated country: “If our state or federal governments start a project, there's certainty of payment that the sponsors can expect”.
This solidity helps attract companies, says Salerno. “There’s a robust legal system, there is a clear accounting system, there is a system of courts where you can go in the event that something doesn't stack up. So a lot of our foreign clients enjoy investing and working here.”
The bank has also performed well in the past 10 months. “We have already exceeded our first-year lending forecast,” says Salerno.
“At one stage, the regulator said, ‘Do you guys still want your licence, given COVID?’ And we said, ‘Our business plan did not include real estate, hospitality, aircraft or shipping finance.’ We’ve seen no hit to our business plan forecast due to the pandemic, but we've seen an increase based on the bringing forward of infrastructure and M&A opportunities. This has fallen into our sweet spot.”
The bank now plans to move increasingly into lead arranger roles. “We’ll be seeing more of the high-value, first-discussion work,” says Salerno. Already, he says, “when there’s an M&A opportunity, we are one of the first banks to get a call. We’ve built up a great track record.”
He adds: “Sometimes we have so many opportunities we run bid trees out of London, New York and Hong Kong in support of the Australian pipeline.
“I always explain to our sponsors and competitors that we’re not just buying assets, we’re actually the underwriter, arranger and structurer of these high-value interactions.”