Al Salam Bank Amplifies Algerian Footprint with Stake Increase in ASBA

Al Salam Bank, the Bahrain-based Islamic bank, has announced the acquisition of a majority stake in Al Salam Bank Algeria (ASBA), thereby increasing its shareholding from 37.43% to 53.13%. This move underscores a key advancement in the bank’s expansion strategy and significantly amplifies its regional footprint.

ASBA, established in 2006, has proven to be a powerhouse in the Algerian banking sector, boasting a portfolio that spans corporate financing, international trade, personal financing, lease financing, property financing, and investment accounts. With 23 branches dotting the nation, the bank has entrenched its roots in the local market.

The investment by Al Salam will further bolster ASBA’s growth prospects, which include broadening its financing portfolio, diversifying product offerings, increasing market share, and accelerating its digitalization drive. Since 2010, ASBA has witnessed its total assets growing at an impressive compounded annual growth rate (CAGR) of 23.3%. At the end of Q1 2023, the bank reported total assets of $2.2 billion, a financing book of $1.3 billion, and a robust customer deposit base of $1.8 billion, making it the fastest-growing bank in Algeria.

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Algeria’s banking sector is thriving, catering to a young demographic with notable growth potential. Strategically located between Europe and the GCC region, the country offers ASBA a plethora of opportunities for growth in retail banking, corporate banking, and trade finance. Al Salam Bank aims to leverage these opportunities and support ASBA’s accelerated growth and expansion in the Algerian market and beyond.

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.” Nayed assured that, with the majority stake, the Bank is dedicated to enabling ASBA to continue expanding its market share, while providing clients with comprehensive product offerings and a seamless banking experience.

This latest acquisition builds upon Al Salam Bank’s successful history of mergers and acquisitions (M&A), which includes the bank’s merger with Bahraini Saudi Bank (BSB) in 2011, the purchase of BMI Bank in 2014, and the acquisition of select assets from Ithmaar Holding, including Ithmaar Bank’s consumer banking business in 2022.

Nayed emphasized, “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.”