[Issue Interview] "Innovation, Growth, Dynamism... The Korean Economy is Amazing"

Dorote Legazoni BNP Paribas Korea Representative

Dorote Legazoni, BNP Paribas Korea Representative
[Photo by BNP Paribas]

The power of innovation, solid growth rate, growth potential, and dynamism. These are the words Dorothea Legazoni, the newly appointed head of BNP Paribas Korea branch last month, used to describe Korea. She said she came to Korea attracted by the innovative strength of our economy. In an interview with Asia Economy on the 28th of last month, Legazoni said, “The International Monetary Fund (IMF) has designated Korea as a developed country, and it is rare for a developed country to have both growth potential and dynamism.”

However, she assessed that liquidity and credit conditions will be important in the Korean financial market this year. Although the global tightening cycle is nearing its end, some industries are facing crises, and some companies may enter a restructuring cycle. Legazoni said, “Restructuring means there will be more demand for funds,” adding, “As a foreign bank, BNP Paribas will take on the role of supplying liquidity to Korean financial institutions.”

As a global investment bank, she also voiced the need for improvements in financial market regulations. Legazoni emphasized “consistency.” She explained, “To resolve the Korea discount (undervaluation of the Korean stock market), policymakers need to give global investors confidence that current efforts will continue long-term and structurally.” She stressed the importance of continuously pursuing efforts such as improving corporate governance.

Legazoni is a corporate finance expert with 25 years of experience in Europe. After earning an MBA from the University of St. Gallen in Switzerland, she began her career in 1998 in Citigroup’s Swiss corporate and investment banking division. She joined BNP Paribas Switzerland as a senior banker in 2009, served as head of Swiss corporate finance in 2012, and moved to lead the German corporate finance division in 2018. In 2021, she took on the role of global head of multinational corporate finance at BNP Paribas headquarters in Paris, France. Since last month, she has been leading BNP Paribas Korea, overseeing the group’s business in Korea.

[Image source=Reuters Yonhap News]

- You have built your career mainly in Europe, including Switzerland, France, and Germany. Is there a special reason you came to Asia, especially Korea?

▲ While working in Europe, I met many global companies from various countries. Naturally, I had many opportunities to collaborate with Korean companies. I was particularly impressed by the important role Korean companies play in the global ESG value chain. As the whole planet dreams of a sustainable future, Korea is showing achievements in areas like global energy transition and future-oriented technologies. Since BNP Paribas places great importance on ESG finance, I judged that there is excellent strategic compatibility with Korea.

- Could you explain in more detail?

▲ Korean companies produce and export eco-friendly products such as liquefied natural gas (LNG) ships and electric vehicles. This is why Korea’s ESG finance level is regarded as leading in Asia. This also lays the foundation for becoming good partners with European countries in the long term. Recently, new industries such as green energy and bio-healthcare have been attracting attention in Europe.

Of course, Europe has faced considerable economic headwinds over the past few years. However, recently the overall economy has been recovering. Both the Federal Reserve (Fed) and the European Central Bank (ECB) are expected to lower benchmark interest rates within the year. This is the first step toward gradual economic normalization.

- How do you view the Korean economy?

▲ The global tightening cycle is nearing its end. This year, Korea’s growth conditions are expected to improve centered on export recovery, and core inflation is expected to stabilize downward around 2%. Personally, I have always been interested in Korea’s innovative strength. The IMF designated Korea as a developed country, and it is rare for a developed country to have both growth potential and dynamism. Last year, which was a post-COVID era and a tightening economy period, Korea showed a solid growth rate of 1.4%.

- Some industries and companies must be facing difficulties.

▲ Some industries are facing crises, and some companies may enter a restructuring cycle. Restructuring means there will be more demand for funds. Liquidity and credit conditions are expected to be important in the Korean financial market this year.

- Many financial institutions have seen deteriorated performance due to real estate project financing (PF) loans.

▲ Like most foreign banks, BNP Paribas does not engage in local real estate PF. However, we recognize that liquidity has become much more important in the Korean financial market since the global tightening phase began. As real estate PF restructuring progresses, demand for funds is expected to increase further. In this situation, BNP Paribas can take on the role of supplying liquidity to Korean financial institutions as a foreign bank.

[Image source=Reuters Yonhap News]

- Financial institutions tend to have low price-to-book ratios (PBR). Will the government’s value-up project help?

▲ Resolving the Korea discount is an important goal. However, policymakers need to give global investors confidence that current efforts will continue long-term and structurally. Efforts such as tax credits and corporate governance improvements. It will take a long time, but by steadily walking this path, trust from investors can be built.

- As a foreign bank, what more would you like from the Korean government?

▲ Market accessibility needs improvement. For the Korean financial market to grow, global investors must be able to easily access the Korean market, and conversely, Korean investors must be able to approach global markets smoothly. It is necessary to internationalize the market by easing unnecessary regulations. I understand that the Korean government has recently started market structure reforms in line with global standards and that this is already a topic under discussion in the political arena.

- More financial institutions are accelerating their overseas market expansion.

▲ In the past, Korean financial institutions expanded overseas more slowly than Korean companies. However, in recent years, Korean financial institutions have been expanding their businesses overseas, especially in Southeast Asia. Considering private and public sector investments, Korean financial institutions can be seen as actively participating in the global financial market. Korea’s overseas net assets are expected to surpass $1 trillion (1,400 trillion won) soon.

BNP Paribas is actively responding to this. We provide continuous liquidity support as well as cutting-edge trading and execution platforms. For clients seeking to develop new markets, we have secured access to local infrastructure and have a deep understanding of local regulations and political environments.

Dorote Legazoni, BNP Paribas Korea Representative, held a meeting with female employees on March 19th to celebrate International Women's Day. At the event, Representative Legazoni shared her experiences of fighting both at work and at home.
[Photo by BNP Paribas]

- You are the first female head of BNP Paribas since its entry into Korea in 1976.

▲ BNP Paribas focuses on diversity, equity, and inclusion. Specifically, by 2025, we aim to have 40% of senior management positions filled by women and to recruit more women in IT and digital roles. We want to create an environment where women can build careers based on their skills, experience, and ambition. Many female leaders in Korea are showing excellent leadership and are true role models. I look forward to collaborating with them. Of course, I will also work with men because diversity is important.

- What goals do you want to achieve while staying in Korea?

▲ Currently, we are carrying out projects supporting overseas expansion, energy transition, and building the electric vehicle value chain. Besides these, I plan to focus on developing the Korea branch’s business and supporting clients both inside and outside Korea. BNP Paribas is the most prestigious bank in the Eurozone, with over 180,000 employees in 64 countries. If clients entrust us with financial matters, BNP Paribas can respond to various financial needs, including financial products. As a ‘one-stop’ bank, we will present solutions that are both traditional and innovative.