Banking & Financial Services
From The Report: Algeria 2013
View in Online Reader

The banking sector is making steady progress as stability improves and economic growth continues. Banking assets grew by 8.6% in 2012 to AD9.78trn (€92.9bn), although branch access remains relatively limited, with only one bank per 28,000 inhabitants compared to one per 12,000 people in Morocco and one per 9000 in Tunisia. After years of high non-performing loan rates, the central bank is gaining a firmer hold on lending, as well as revitalising the leasing segment through new public housing programmes. The capital markets are expected to benefit from a new raft of initial public offerings. Insurers are also expanding the products on offer, with personal health coverage becoming increasingly popular.

This chapter contains a viewpoint with Mohammed Laksaci, Governor, Bank of Algeria, and interviews with Abdenour Houaoui, General Manager, Arab Leasing Corporation; and Abdelhakim Berrah, President, Commission for Stock Market Organisation and Supervision.

Articles from this Chapter

Overview

New horizons: A slowly advancing sector has plenty of room for growth and technological development
OBG
plus

The Algerian banking industry remains dominated by six state-owned banks, which account for the majority of market share; however, private institutions, all of which are foreign-backed, are growing rapidly. In contrast to Morocco and Tunisia, the sector is characterised by very high levels of liquidity, which makes for a stable financial system but also points to a lack of intermediation that has constrained wider economic growth. Cash remains king, with the ATM and payment terminal networks…

Overview

Strong prospects: The outlook for growth in the market appears promising as reforms set in and more life firms are established
OBG
plus

As is the case in many emerging markets, the Algerian insurance sector is characterised by both low penetration rates and much room for growth, particularly given the large domestic market and robust outlook for retail segments. The life segment is small and shrank in 2012 following the compulsory separation of life and non-life businesses. Despite this, in 2013 there have been signs that this restructuring is now starting to bear fruit, with the prospects for medical insurance particularly…

Analysis

New avenues for growth: Personal coverage is widely expected to take off soon
OBG
plus

Personal insurance is much less developed in Algeria than property and casualty lines, a reversal of the situation in most Western countries – where life tends to dominate – but par for the course in emerging markets. Personal insurance premiums also fell in annual terms for the entirety of 2012, as a new law banned firms from selling both life and non-life protection (obliging those that wish to do both to spin off separate personal insurance affiliates) the previous year. However, the…