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  • Algeria's banking sector

    Oil-rich Algeria needs to speed up banking reform and privatization if it's to develop the economy beyond its hydrocarbon sector, says the World Bank's regional head of North Africa.

    Amid a multi-billion dollar development program the country is preparing to privatize one of its major banks - a process that stalled in 2004 - against a background of complaints from businessmen that a banking sector plagued by bureaucracy, corruption and lack of transparency is holding back the country's development.

    "A functioning financial sector is one of the prerequisites for investment and while there's some progress, it's clearly been very slow," said the World Bank's Theodore Ahlers.

    The International Monetary Fund has also called on the government of this country of some 33 million to press on with banking reform and promote competition in the sector.

    Now flush with cash from high oil prices, Algeria's President Abdelaziz Bouteflika has begun implementation of a three-year $80 billion public spending plan to 2009 to develop the country's infrastructure in an effort to modernize and create jobs

    The lack of banking reform in the one-time Soviet style socialist economy has been very costly for Algeria, Ahlers said. Latest available figures show that from the 1990s to 2002, repurchasing of bad debts loaned by state banks to many of the country's loss-making state enterprises cost the Algeria treasury 4% of gross domestic product a year. That process is continuing to a lesser degree within the $80 billion a year economy.

    Simple transactions and money transfers can take weeks or even months to complete and there is little concept of customer service.

    "Algerian banks just don't have the expertise to evaluate whether it's worthwhile giving a loan to a local businessmen and they just don't want to take the risk," said Issad Rebrab, the head of sugar business Cevital and one of the country's most successful businessmen.

    Around 15 foreign banks including Societe Generale,(13080.FR) BNP Paribas (1310.FR) and Citibank (C) have set up shop here, but their remit is limited and local investors say they too are also reluctant to finance Algerian entrepreneurs.

    Consequently, loans are difficult to secure and many local companies have to dip into their own reserves to grow their business, Rebrab added.

    The government's recent announcement that it will privatize Credit Populaire d'Algerie, one of Algeria's biggest and potentially most attractive banks to investors, is a major test of the country's modernization resolve.

    In 2004, the government targeted three big banks - the CPA, Banque National d'Algerie and Banque de Developpement Local - for restructuring and privatization but the sell-off plan foundered in the face of opposition from the county's powerful unions and other vested interests. That crimped further reforms and today six state banks still control almost 95% of the market.

    Now, a few government reshuffles later, the Paris-educated Minister for Financial Reform Karim Djoudi, who is one of the country's younger officials, aims to ensure that Credit Populaire d'Algerie is ready for privatization by the end of this year.

    "Reform in this sector is happening, but it will take some time," Djoudi told Dow Jones.

    The Algerian government has picked U.S. investment bank Rothschild Business Bank to evaluate and prepare the CPA for privatization. It's also testing a new payment clearance system that will be introduced in the next couple of months to speed up transactions.

    CPA's capital is between $400 million and $500 million and controls around 12% of the Algerian market.

    "There's been a lot of interest in CPA from big European banks," Djoudi said, "but we want the bank that buys it to be a big strategic bank that will help to develop the whole sector."

    A foreign banking source in Algiers said French banks were looking at CPA with a view to buying it.

    Djoudi hopes that once the CPA is sold it'll provide a model for the rest of the sector and other privatizations will follow.

    "The privatization of CPA is very important to the banking sector - it'll signal that Algeria is finally moving in the right direction," the World Bank's Ahlers said.

    Algeria must speed up banking reform - World Bank

  • #2
    International banks keen on Algeria branches

    ALGIERS, Algeria, May 16 -- The Minister Delegate to the Ministry of Finance charged with financial reforms, Abdelkrim Djoudi unveiled that a huge number of international banks have presented their agreement demands to open branches in Algeria, pointing out at the fact that the phenomenon went beyond the French banks to include Italian, Spanish and even American banks.

    Abdelkrim, through his press conference on the occasion of the inauguration of the first salon for financial services, made it clear that many economic actors are interested in the financial market in Algeria that gives them big opportunities of investment in Algeria.

    According to the Algeria news agency quoting the minister, the national financial market in Algeria is now an important market for investors who are bound to come to invest and share risks with Algerian companies.

    The minister points out that bank reform is being done on fast rate, and its first fruits appeared when a new credit system has been announced, using numeral checks. Bank reforms that have been announced from the government covers, apart from the improvement of bank management and the creation of new specialized banks like the one affiliated to the bank of agriculture and habitat, monitor banks’ privatization, where the privatization process of the Algerian popular credit started last February.

    On other part, the minister declared that banks have improved performance in terms of credits which reach 1800 billions DA last year. On his part, the director of the research office Strategyca, Mr Siagh, declared that the financial sector in Algeria is witnessing a remarkable development, and it is now in an intersection, and needs new technologies to go along with the rapid development.

    >>>Source<<<

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    • #3
      French and Emirates banks to open in Algeria

      The council for credits and money decided yesterday, to give the agreement to two banks. The first one is French, with the name Calyon, and the second is from the United Arab Emirates (UAE) under the name of Essalam (peace), with the capital that meets the new conditions, that is more than 2.5 billions DA.

      A statement issued yesterday by the council, which is affiliated to the Bank of Algeria, declared that after the meeting that was presided over by Algeria Bank’s commissioner, Mohammed Laksassi, that two demands of authorisation to open two foreign bank branches were discussed, and that the council, after deliberation accepted the two demands.

      The two demands concern, according to the same statement, the bank Calyon Algeria, which is a branch of the group Agricultural Credit which was created with the capital of 2, 5 billions DA. The second bank is Essalam Bank of Algeria, which was made from investors from Arab countries that include “Financial Amlak” and “Amar Amlak”. The bank was made with the capital of 7, 2 billions DA.

      The two banks were authorised to be built according to international standards, that is to perform all financial and bank transfers according to article 66 and 72 of the order 03-11 dated on 26 August 2003 that are related to credit and money.

      >>>Source<<<

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      • #4
        Three big Portuguese banks to open branches in Algeria



        It is expected that three Portuguese banks branches will be opened in Algeria, and this in the context of the expansion of a Portuguese presence in Algeria and the diversification of investment that has been estimated at 500 millions dollars, according the ambassador of Portugal in Algeria, Mr. Luis De Almiassida Camialo. The Portuguese ambassador, in a press briefing held on the margins of the Algiers International Fair, pointed out that the three banks, that are amongst the most important banks in Portugal, have decided to open branches in Algeria. These banks are as follows: the General Fund for Deposits, Millennium BCB, and Esperito Santo.

        The three banks will accompany and support Portuguese companies that are, or will be, working in Algeria through direct foreign investments. The General Fund for Deposits has its headquarter in Morocco, the Millennium BCB bank was created in 2001, and is presided over by Fernando Nogera and is considered as the biggest private financial group in Portugal with a net of 1100 agencies and more than 3.5 millions customers. It represents 25% of the financial market in Portugal. The third bank is the second biggest private bank in Portugal, it is presided over by Carlos Fernando Olafo Azirido and is active in Morocco, Angola and Johannesburg.

        The Portuguese ambassador is expecting that Portuguese investments will see substantial enlargement with Portuguese companies showing a huge interest in the Algerian market.

        Three big Portuguese banks to open branches before the end of the current year

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        • #5
          Arab, European banks want to open branches in Algeria

          Around 10 Arab and European banks requested the opening of branches in Algeria this year, a media source said Sunday.

          The source said in a press release a state council was about to give permissions for the banks to open their branches.

          Among the banks are the Moroccan Bank for Foreign Trade and the Moroccan Commercial Bank, as well as banks from Tunisia, the United Arab Emirates (UAE), Lebanon, HSBC from Britain and Citibank.

          >>>Source<<<

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          • #6
            Algeria to kickstart bank sector privatization in 2006

            LONDON -(Dow Jones)- Algeria is to kickstart privatization of its banking sector with a tender for Credit Populaire d'Algerie, one of Algeria's biggest and potentially most attractive banks, the minister for financial reforms said Tuesday.

            "We've already had a lot of interest in the bank from banks in Italy, the U.K., the U.S. and France," Karim Djoudi told Dow Jones Newswires.

            Djoudi is part of an Algerian delegation in the U.K. for a two-day visit to strengthen commercial and trade relations between the two countries.

            The tender will be announced between September and October this year and awarded by February of 2007, Djoudi said in the interview, but declined to say how much Algeria expected to raise from the sale.

            "We'll have to wait and see what the market offers," he added.

            Privatization of CPA, which has capital of $400 million to $500 million and controls around 12% of the Algerian market, will lead the way for the selloff of the oil-rich country's other state-owned banks, Djoudi said.

            U.S. investment bank Rothschild Business Bank is working on evaluating and preparing the CPA for privatization, while the government implements a new payment clearance system that was introduced in May to speedup transactions.

            In 2004, the government targeted three big banks - the CPA, Banque National d'Algeria and Banque de Developpement Local - for restructuring and privatization but the selloff plan foundered in the face of opposition from the country's powerful unions and other vested interests. That crimped further reforms and at present six state banks still control almost 95% of the market.

            But now the country is more stable after years of civil war, the government has begun implementation of a $100 billion public spending plan to 2009 to develop the country's infrastructure in an effort to modernize the economy and create jobs outside the hydrocarbon sector.

            Paris-educated Djoudi, who is one of the country's younger officials appointed in one of many government reshuffles, is also working on a packet of financial reforms including recently passed laws to modernize the country's mortgage and insurance market.

            During the two-day visit to London - the first official trip since Algeria won independence from France in 1962 - Djoudi and the other ministers on the Algerian delegation will be meeting with leading U.K. businessmen interested in investing in various sectors of the North African country.
            Among the meetings is a lunch with top bankers at HSBC.

            "The prospects are good now in Algeria," Djoudi said. "Lots of bankers are coming to talk about investing in Algeria and in the financial markets there," he added.

            Oil major BP has invested heavily in Algeria's gas deposits in the Sahara desert as are other leading energy companies Statoil, Cepsa, Repsol and Anadarko. Algeria is a member of the Organization of Petroleum Exporting Countries and produces around 1.4 million barrels a day of crude oil. It's also Europe's number three gas supplier.

            >>>2nd source<<<

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            • #7
              Very good news. We need a much more advanced/professional/transparent banking system. We are very far behind. Alot of corruption going on.

              I am glad Algeria strengthened its business relations with the UK recently.

              Khokom.

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              • #8
                The financial system is the blood vein of any economy. Good to hear that Algeria is heading in the right direction.

                Comment


                • #9
                  Bank reforms settlement, next priority



                  Bank reforms settlement, next priority

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                  • #10
                    KIPCO's Tunis International Bank expands operations in Algeria, Libya

                    Tunis International Bank's (TIB) has begun expanding its operations in Algeria and Libya, in line with the strategy of Kuwait Projects Company (KIPCO), the holding company, said TIB's ECO Dr. Mohammad Al-Faqeeh on Thursday.

                    Speaking to Kuwait News Agency (KUNA), he said that capital of the Algeria Gulf Bank, also a KIPCO subsidiary, was brought up from USD 20 million to USD 35 million only three years after its establishment.

                    Moreover, he said TIB recently signed a memorandum of understanding with a Tunisian institution for the establishment of a join company specialized in providing financial and administrative consultations, adding that this was awaiting approval of Tunisian authorities.

                    Al-Fiqeeh explained that TIB, which was held by KIPCO through the United Gulf Bank, had registered profits of USD 9.2 million in 2005 compared to USD 6.7 million the previous year.

                    TIB was established in June 1982 as a fully licensed banking corporation. In October 1997, the United Gulf Bank acquired 48 percent of the bank's issued capital. Subsequently, this ownership has increased to 85 percent.

                    Presently, TIB provides a comprehensive range of international financial services for corporations, financial institutions, and individuals and governments, both in Tunisia and in other countries.

                    KIPCO's Tunis International Bank expands operations in Algeria, Libya

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                    • #11
                      Al Salam Bank enters Algeria

                      Al Salam Bank has acquired the license to launch an Islamic bank in Algeria with a paid up capital of US$100 million. The bank will launch its operations soon in the country and start offering a wide range of Shari’ah compliant banking services.

                      Mr Mohamed Ali Alabbar, Head of Al Salam Bank’s Founders Committee, said: “The opening in Algeria underscores the ambitious vision of the bank to expand into new markets that have great potential for growth. The bank is already functioning in Sudan and Bahrain, and will now play a premier role in Algeria’s banking sector too by offering an array of Shari’ah compliant banking services and solutions.”

                      Mr Alabbar added: “The expansion to Algeria complements the bank’s efforts to enhance its presence regionally, especially following the profits recorded during the first stage of its growth. Al Salam Bank will concentrate on the GCC market, with special focus on emerging markets as part of its second phase of expansion.” Mr Alabbar said that the Algerian economy is poised for an impressive growth following the structural and economic reforms initiated by the government. The bank’s presence in Algeria will complement the needs of businesses in various sectors of the economy.

                      “The Algerian government has taken several steps to liberalize the economy and attract domestic and foreign investments. The new investment law would facilitate this and help channelize more investment to support the growth of the national economy,” said Mr Alabbar.

                      Mr Hussein Mohammed Al Meeza, Deputy Head of Al Salam Bank Founder’s Committee, said: “The bank’s expansion into Algeria is in line with our strategic plan to tap the potential of emerging markets in the region. Algeria is pursuing a very aggressive role in modernizing the economy and supports the initiatives of both the private sector and foreign investors. The bank has already finalized the procedures to set up operations and will have its headquarters in the capital city.”

                      Algeria recently unveiled a new plan aimed at channelizing US$80 million to support the economy. Several regional and international banks are expected to enter the Algerian market. For a population of 31 million, Algeria has about 1,200 bank branches – one for every 29,000 individuals. Currently, the country has 18 banks and five financial institutions.

                      Al Salam Bank enters Algeria

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                      • #12
                        Fransabank announces move into Algerian market

                        BEIRUT: Fransabank announced Wednesday that its regional expansion plan now includes an agreement to become the first Lebanese bank to officially operate in Algeria.

                        In a statement, Fransabank said it would open a branch after obtaining a license from the Algerian Central Bank.

                        Nadim Kassar, the president of Fransabank Algeria, told a press conference that the bank would open more branches in Algeria in the future.

                        "We will start providing small- and medium-size businesses in Algeria loans and in the future we will introduce leasing services," Kassar said.

                        Many leading Lebanese banks have expanded outside Lebanon in the past few years to diversify their incomes.

                        Lebanese banks are now operating in 10 Arab countries, including Syria, Jordan, Egypt, Sudan and Algeria.

                        Total assets of Lebanese banks currently stand at some $72 billion - or three times the country's GDP.

                        Both BLOM and Audi Saradar have acquired medium-sized banks in Egypt within the past two years ago as part of their respective plans to tap a growing market with a population of more than 70 million people.

                        Fransabank announces move into Algerian market

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                        • #13
                          Medelci sees Spanish banks operating in Algeria in 2007

                          MADRID (AFX) - Algeria''s Finance Minister Mourad Medelci said he expects Spanish banks to be operating in the country in 2007, as the sector's privatisation process gathers pace, AFP reported.

                          Medelci was speaking after a meeting with Spain''s Industry Minister Joan Clos.

                          Medelci did not provide the names of any specific banks but reports have highlighted Banco Santander Central Hispano SA's interest in the Algerian banking sector.

                          Both SCH and peer Banco Bilbao Vizcaya Argentaria SA declined comment.

                          Algeria began the privatization of its main public bank Credit Populaire d'Algérie this month.

                          Medelci sees Spanish banks operating in Algeria in 2007

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                          • #14
                            Credit Agricole eyes Algeria

                            PARIS (Reuters) - Credit Agricole, France's biggest retail bank, said it was currently looking only at the Algerian market for possible acquisitions and that it was not interested in Turkey's Oyakbank.

                            "We are only looking at one possible deal at the moment, which is in Algeria," Jean-Frederic de Leusse, Credit Agricole's group director for international development, told analysts.

                            In Algeria, Credit Agricole has expressed an interest in buying a majority stake in Credit Populaire bank.

                            Credit Agricole, which has made a series of overseas acquisitions during the past year, has also been linked with Oyakbank, but the French company said it had no current interest in the Turkish bank.

                            "This is not on our current agenda," Chief Executive Georges Pauget told analysts.

                            Credit Agricole shares closed down 0.22 percent at 31.33 euros. One analyst said the company could have provided more guidance on prospects for 2007.

                            "The company is still sticking with its guidance presented in December last year. A more precise EPS (earnings per share) guidance for 2007 would have been welcomed by investors," said West LB analyst Christoph Bossmann.

                            Credit Agricole said its Calyon investment bank was likely to have "robust growth" in the near future.

                            In a slide presentation available on its Web site, Credit Agricole said Calyon had expertise in human resources and had strengthened its customer base, enlarged its range of products and built up a strong international network.

                            "These four factors should ensure robust growth for Calyon over the coming years," Credit Agricole said.

                            Credit Agricole said demand for credit would probably remain robust and revenues in the investment banking sector continue to rise rapidly.

                            Last month, Credit Agricole reported a 12 percent year-on-year rise in third-quarter net profit, although the figure was lower than net profit in previous quarters in 2006.

                            Credit Agricole's shares have fallen over the past two months from a record high of 36.15 euros reached in October. Since the start of 2006, they are up around 17 percent, slightly outperforming a 15 percent gain in the DJ Stoxx European bank sector.

                            Credit Agricole will not bid for Oyakbank, eyes Algeria

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                            • #15
                              Algeria to establish bank to finance youth, micro-credit projects

                              Algerian Employment and National Solidarity Minister Djamal Ould Abbas announced on Monday (December 25th) in Algiers that a bank will be set up in 2007 to finance the projects of unemployed youths as part of the National Youth Employment Supporting Agency (ANSEJ) and the National Agency for Microcredit Management (ANGEM) devices. The bank "will be soon introduced to the government council", Abbas said. The decision aims at providing more efficient financing to the programmes of the two agencies. Although some 100,000 jobs were created by ANGEM and ANSEJ this year, the rate of financing of the eligible projects by public banks stood below 10%. The projects cover mainly the sectors of services, craft industry, and transport.

                              Algeria to establish bank to finance youth, micro-credit projects

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