Algeria

#Algeria edges towards Islamic finance as energy income dives

Algeria is edging slowly towards offering banking services to suit more religiously conservative investors. The country is now looking for more ways to offset the sharp fall in oil prices and its energy revenues. Six state-run banks plan to start Islamic financial services by the end of the year or in early 2018, and a national Shariah board that would oversee Islamic banking is also planned by the end of 2017. However, Algeria’s Islamic finance plan still faces huge barriers. It lacks a legal framework and technical expertise. Algeria is far behind North African neighbours Morocco and Tunisia, which have started to develop legislation for Islamic finance and sukuk bonds, overseen by a central religious board. Algeria is targeting domestic savers rather than foreign investors. Many local people distrust the state-owned banks and keep large sums at home, untaxed, in Algerian and foreign currency.

#Algeria warily edges towards Islamic finance as energy income dives

Algeria is edging slowly towards Islamic banking services to suit more religiously conservative investors. Finance Minister Hadji Baba Ammi has already announced plans for the country's first local bond. Now six state-run banks plan to start Islamic financial services by the end of the year or in early 2018 and a national sharia board that would oversee Islamic banking is also planned by the end of 2017. Algeria's Islamic finance plan still faces huge barriers. It lacks a legal framework and technical expertise. Algeria is far behind North African neighbours Morocco and Tunisia, which have started to develop legislation for Islamic finance. The country is targetting domestic savers rather than foreign investors. Many local people distrust the state-owned banks and keep large sums at home in Algerian and foreign currency.

#Algeria plans interest-free local #bond to offset dive in energy income

Algeria plans to raise money from an interest-free local bond in order to offset the huge fall in its energy earnings. The North African OPEC member has already cut public spending, introduced new taxes and reduced government subsidies on fuel. Finance Minister Hadji Baba Ammi said the new bond would not bear interest, which may help attract a greater number of Algerian buyers. The minister said bondholders would receive a share in projects that the issue would finance as an incentive. The government launched its first local bond last April, but it was harshly criticised by the religious community. While neighbours Morocco and Tunisia are developing laws for Islamic finance, Islamic banks and sukuk bonds, Algeria still has no legal framework for such operations.

#Algérie: La finance islamique est complémentaire et non une alternative

Kader Merbouh, expert en finance islamique penser que la finance islamique est la solution pour capter l’épargne dormante et en dehors du circuit bancaire en Algérie. L’Algérie a été un point d’encouragement à la finance islamique. Tant par les banques conventionnelles qui proposeront dans les prochaines années des produits de la finance islamique pour capter leur clientèle et tant par les banques islamiques comme Salam ou Baraka. Il y a aussi l’arrivée de nouveaux acteurs qui voudront être présents sur le marché algérien. Cela va créer une triple dynamique. L’Algérie est un marché formidable. La loi de modernisation bancaire en Algérie va introduire quelques règlements pour faciliter la finance islamique.

#Algeria plans to launch #Islamicfinance, push banking reform

Algeria is preparing to launch Islamic financial services as the OPEC member seeks new ways to raise money after a sharp fall in energy earnings. Algeria’s outdated financial system has been a barrier to investment as the government seeks to diversify its economy away from oil and gas, which account for 60 percent of the state budget. Boualem Djebbar, head of the state-run Banks and Financial Institutions Association, said a legal framework would need to be finalized before introducing Islamic financial services. Djebbar said developing the banking system had become inevitable, with a particular focus on electronic payment systems, which are still little used in Algeria.

$10m a Sharia-compliant financing for #Algeria oil services company

The Arab Petroleum Investments Corporation announced the completion of an innovative Sharia-compliant financing facility for Algeria’s Oil Recovery Services. The financing was arranged in conjunction with Paris-based oil and gas private equity firm 4D Global Energy Advisors. The initial $10 million financing will act as a template for the financing of several contracts of the company.

APICORP completes Shari’ah-compliant facility in #Algeria

The Arab Petroleum Investments Corporation (APICORP) announced the completion of a Shari’ah-compliant financing facility for Oil Recovery Services SAL (ORSsal) with operation in Algeria. The annual MENA Energy Investment Outlook Report issued by APICORP stated total planned energy investments in the MENA region will reach $900 billion over the next five years. According to the report, Algeria will invest $8 billion on gas as it focuses on developing its midstream sector as part of the country’s plan to expand total pipeline-network capacity by 30 per cent.

Abu Dhabi Islamic Bank plans Morocco and Algeria expansion

Abu Dhabi Islamic Bank PJSC is planning expansion in Africa markets to tap demand in countries with a large Muslim population. In Africa, the bank has looked closely at Algeria and Morocco, Chief Executive Officer Tirad Mahmoud said. The bank may consider an acquisition next year as part of the plan, he added. The bank also applied for licenses in Algeria and Libya and is considering Tunisia and Morocco. The bank was among lenders that bid to buy the retail banking assets of Citigroup Inc. in Egypt this year, losing out to Commercial International Bank Egypt SAE last month. Mahmoud believes the banking industry is on the cusp of a historic transformation that will see a convergence between conventional and ethical banking.

4,6 milliards DA de chiffre d’affaires attendus pour 2014

La compagnie d’assurance, Salama Assurances Algérie, devra clôturer l’année 2014 avec un chiffre d’affaires en progression de 4,6 milliards de dinars, a révélé son directeur général, Hadjou Abdelhakim. L’assurance automobile représente environ 72% du portefeuille de la compagnie, soit 4% de parts de marché. L’année 2015 sera donc riche, pour Salama Assurances qui compte non seulement de lancer un nouveau produit dédié aux agriculteurs, mais aussi ouvrir avec un partenaire local une nouvelle filiale d’assurance de personnes.

L’assurance islamique arrive bientôt en Algérie

L’assurance islamique, dite “takaful”, débarque en Algérie grâce à la compagnie Salama Assurances Algérie. La compagnie algérienne prévoit de lancer des produits d’assurance islamique, soit l’équivalent de la mutualité, dans un proche avenir, comme l’a indiqué Abdelhakim Hadjou, son directeur général. Selon ce dernier, le fait que la législation algérienne n’encadre pas encore ce type d’assurances ne sera pas un frein à la commercialisation de ce service. Il peut y avoir dans les mois à venir un intérêt. On a même parlé de cela au Parlement avec la participation des banques. Il y a eu débat sur l’opportunité de légiférer sur le takaful, a-t-il ainsi déclaré.

Al Salam Bank Algeria under temporary administration

The Commission Bancaire of the Bank of Algeria decided on July 3, 2014 to put Al Salam Bank Algeria under temporary administration, due to differences between certain shareholders of Al Salam Bank Algeria, who were also the founders of the Bank.

Sharia-Compliant Finance for MSMEs in Algeria

Algeria hopes to stem high unemployment rates among its young population by promoting the development of micro, small and medium sized enterprises (MSMEs). Key to that effort, of course, is the provision of financial services. Therefore, the Algerian government set out to make a Sharia-compliant product available that is both affordable and scalable. In collaboration with several national and international institutions the Algerian Ministry for Industry, piloted one such product in the Ghardaia region of Algeria. Four years later, this musharaka product has provided new opportunities for 167 MSMEs. Given the success of this product, musharaka is now available through Al Baraka branches nationwide. The bank is also working with its nationwide branches to test other Sharia-compliant products, including, murabaha and qard hassan as well as Sharia-compliant micro-insurance products.

Still springtime in North Africa? [Banker Middle East]

North Africa is moving towards the development of the Islamic financial industry as a response to the protests in several countries of the Arab world. Although there are some difficulties to overcome like low banking penetration and limited development of retail banking in general, there ist still potential for growth and progress. However, until a more stable political environment is provided, Shari'ah-compliant banking will be a niche market in North Africa.

Al Baraka planning to buy bank stake

Bahraini Islamic bank Al Baraka Banking Group set its purpose for 15% growth in net profit this year and wants to buy a 75pc stake in an unlisted Indonesian bank as part of its global expansion plan.
Adnan Ahmed Yousif, Al Baraka's chief executive, revealed that they are discussing with Chinese shareholders of an Indonesian bank.

Al Baraka had a 2011 full-year profit of $212m, up 10pc on the profit registered in 2010. The bank plans to open 50 more branches this year throughout the world, out of which 20 will be in Turkey and five in Algeria, respectively Egypt.

ICD poised to boost activity with SR1 billion SME fund

It seems that the private sector funding arm of the IDB Group, is entering a new strategy to take its financing directly to its constituencies and to make its financing impact more on the real economy through the generation of employment and promoting growth.
This contains opening regional offices; setting up two new departments at the ICD; launching more Ijara (leasing companies) in diverse markets such as Albania, Saudi Arabia and Algeria; establishing SME investment funds including a SR1 billion fund for Saudi Arabia; and establishing a mortgage finance company in Saudi Arabia in anticipation of the long-awaited mortgage law.

Islamic Banking and Finance in North Africa

In its new publication, Islamic Banking and Finance in North Africa, the African Development Bank assesses the state of Islamic banking in the region and explains why its use has been limited. The report considers the future potential of Islamic finance, including its possible alignment with North Africa’s development goals, particularly its ability to increase the diversification of funding sources.

The report takes into consideration the effect of Islamic banking’s focus on the equitable distribution of risk and returns between suppliers and users of funds. Islamic Banking and Finance in North Africa goes further by exploring whether Islamic-style finance contracts could contribute to the development objectives of North African countries.

full report for free download: http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operati...

Algerians seek expanded Islamic banking options

Bankers and business experts concluded that Algeria needs legal reforms in order to encourage the growth of sharia-compliant finance.
Islamic finance currently accounts for 1% of banking activity in Algeria.
Fouaz Sid, a bank clerk working for the Algerian arm of the French bank Société Générale, stated that in order to encourage them to diversify finance products in Algeria, every product which conforms to sharia law must be able to compete with the more traditional products.

Islamic finance in Algeria has 15 % market share

Currently three Islamic financial institutions exists with a market share of 15 %: El Baraka Bank, Salem Banque and Salama Assurance. The figures are quoted by Hideur Nacer, secretary general of El Baraka, saying that the sector is about Dinar 100 bn annually, 15 % of the private market and 1.5 % of the public sector market.

Two foreign entities, Abu Dhabi Islamic and Haider Islam are said looking to enter the Algerian market. Main obstacle is supposedly the partnership rules in regulation (49-51 %) and high capital requirements of Euro 100 mn.

Albaraka Sees Indonesia Purchase in First Quarter

Albaraka Banking Group BSC, the biggest publicly traded Islamic lender in Bahrain, expects to complete an acquisition in Indonesia in the first quarter of 2011 as part of an expansion.
The bank has identified targets for the planned transaction in the Asian country. Albaraka has also identified an acquisition target in Malaysia.
Albaraka this year acquired Pakistan’s Emirates Global Islamic Bank Ltd., which boosted its network in the country to about 90 branches. It also began operations in Syria this year.
The Manama-based bank has received approval to set up a representative office in Libya to benefit from the country’s strong trade ties with other markets where the bank operates, such as Egypt, Turkey, Algeria and Jordan.
The bank expects total loans to increase 20 percent in 2010.

AlBaraka: Algerian subsidiary posts strong results

Bahrain Tribune reported on 9 April that, Banque Albaraka D'Algerie, a subsidiary of Bahrain-based Albaraka Banking Group (ABG), announced a net income increase to USD 19 mn in 2007, which is a 34 % growth.

Mohammed Seddik Hafid, Board Member and General Manager of the bank. Adnan Ahmed Yousif is Chairman of the Board of Directors of Banque Albaraka D'Algerie and President and Chief Executive of Albaraka Banking Group.

Source: http://www.menafn.com/qn_news_story_s.asp?StoryId=1093192151

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