Bahrain’s Al Salam Bank acquires majority stake in Algerian unit

Bahrain’s Al Salam Bank has acquired a majority stake in Al Salam Bank Algeria increasing its shareholding from 37.43 per cent to 53.13 per cent.

With total assets growing at a compounded annual growth rate (CAGR) of 23.3 per cent since 2010, Al Salam Bank Algeria is the fastest-growing bank in the North African country closing Q1 2023 with total assets of $2.2bn, a financing book of $1.3bn and a customer deposit base of $1.8bn.

The acquisition represents a significant milestone in the Bahraini lender’s growth strategy and further expands its regional presence. The transaction will also strengthen the growth prospects of the bank’s Algerian unit, which aims to grow its financing book, diversify product offerings, increase market share and accelerate its digitalisation journey.

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 Al Salam Bank Algeria with a range of opportunities to grow retail banking, corporate banking, and trade finance.

Al Salam Bank plans to further support its Algerian business to accelerate its growth and capture new pockets of opportunities within the country and the wider region.

“This strategic transaction will further reinforce our position in the MENA region. Al Salam Bank Algeria is a highly promising growth story with an annualised return on equity close to 20 per cent in Q1 2023. Having acquired a majority stake, we are committed to ensuring that ASBA continues to gain market share while providing clients with a complete product offering and a seamless experience,” said Rafik Nayed, group CEO of Al Salam Bank.

“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. Merger and acquisition (M&A) will remain an important pillar of our growth plans.”

Founded in 2006, Al Salam Bank Algeria is a leading Shariah-compliant bank with 23 branches across the North African country. Its operations span corporate financing, international trade, personal financing, lease financing, property financing, and investment banking.

Al Salam Bank’s growth strategy

Meanwhile, the deal builds on the bank’s successful M&A track record including the latest acquisition of select assets from Ithmaar Holding including the $2.2bn deal for Ithmaar Bank’s consumer banking business in 2022.

Al Salam Bank said the transaction supports its growth trajectory and its efforts to grow and diversify its business lines. The bank’s success is underpinned by a strategy that targets sustainable double-digit growth across all metrics and increased incomes from a diverse range of streams.

The transaction includes the acquisition of the entire consumer banking business of Ithmaar Bank. It also includes a 26.19 per cent stake in Bank of Bahrain and Kuwait, a 55.91 per cent shareholding in Solidarity Group Holding and other assets including MasterCard shares and a portfolio of Sukuk and liquid assets.