Al Salam Bank ups stake in Algerian unit with strategic deal
MANAMA, June 21, 2023
Bahrain-based Islamic bank Al Salam said it has acquired a majority stake in its Algerian subsidiary - Al Salam Bank Algeria (ASBA), by raising its shareholding from 37.43% to 53.13%, following the purchase of shares from various shareholders.
Announcing the strategic move, Al Salam Bank said this was a significant milestone in its growth strategy and would further help expand its regional presence.
The transaction will also strengthen the growth prospects of ASBA which aims to grow its financing book, diversify product offerings, increase market share, and accelerate its digitalization journey, it stated.
ASBA is a leading Sharia-compliant bank established in 2006, with 23 branches across Algeria. Its operations span corporate financing, international trade, personal financing, lease financing, property financing, and investment accounts.
With total assets growing at a compounded annual growth rate (CAGR) of 23.3% since 2010, ASBA is the fastest growing bank in Algeria closing Q1 2023 with total assets of $2.2 billion, a financing book of $1.3 billion, and a customer deposit base of $1.8 billion.
The banking sector in Algeria boasts strong fundamentals, serving a young population with significant growth potential. The country's strategic location in Africa, between Europe and the GCC region presents ASBA with a range of opportunities to grow retail banking, corporate banking, and trade finance.
Al Salam Bank plans to further support ASBA with the objective of accelerating its growth and capturing new pockets of opportunities within the country and the wider region.
Commenting on the acquisition, Rafik Nayed, Group Chief Executive Officer of Al Salam Bank, said: "This strategic transaction will further reinforce our position in the Mena region. Al Salam Bank Algeria is a highly promising growth story with an annualized ROE close to 20% in Q1 2023."
"Having acquired a majority stake, we are committed to ensure that ASBA continues to gain market share while providing clients with a complete product offering and a seamless experience," he stated.
Al Salam Bank’s acquisition of ASBA builds on the bank’s successful M&A track record, including its successful merger with Bahraini Saudi Bank (BSB) in 2011, the acquisition of BMI Bank in 2014, and the latest acquisition of select assets from Ithmaar Holding including Ithmaar Bank’s consumer banking business in 2022, stated Nayed.
"Al Salam Bank has completed several landmark transactions over the last decade that have cemented our position as one of the region’s leading Islamic financial institutions. M&A will remain an important pillar of our growth plans," he added.-TradeArabia News Service
