High levels of liquidity and a total loan book that accounts for just half of deposits characterise the Algerian banking sector. The industry remains dominated by publicly owned banks, which constitute around nine-tenths of deposits and loans, though foreign-backed private banks are major players in trade finance and are highly profitable. Penetration is roughly in line with neighbouring countries and well above that of the wider North African region, but the level of banking sophistication and financial intermediation remains low, with relatively few retail clients borrowing money from banks or using debit cards. Public banks are expected to continue to dominate the industry for the foreseeable future, but the private sector should gain further market share on the back of such factors as network expansion and product innovation.
This chapter contains a viewpoint from Mohammed Laksaci, Governor, Bank of Algeria; and a dialogue with Boualem Djebbar, CEO, Banque de l’Agriculture et du Développement Rural, and Karim Eddine Khellili, CEO, Banque Nationale d’Algérie. It also includes an interview with Abderrazak Trabelsi, General Delegate, Professional Association of Banks and Financial Establishments (ABEF).