‘The privatisation of public banks is a very big decision on the part of the government,’ says a senior banker in Algiers. ‘It is intended to improve their performance so that they can better meet the needs of their customers and of private companies.’
‘The opening up of the capital of these banks will facilitate the improvement of their operations,’ Djamel Zeriguine, head of division at Agence Nationale de Developpement de l’Investissement, told MEED.
About 25 local and international banks are understood to have expressed interest in the CPA sale, although the exact share on offer has not yet been defined. ‘It will be determined during the negotiation process with the successful bidder,’ says the banker. ‘It would be beneficial to sell more than 51 per cent – the bank will be easier to manage if the state has a smaller share.’
The bank, which has capital of AD 21,600 million ($334 million), has a relatively clean portfolio. ‘The decision to privatise CPA was made six-to-seven years ago, so the government has made an effort to address its portfolio problems,’ says the banker.
One of the challenges faced by the international investor will be how to deal with the bank’s unwieldy workforce. CPA employs about 3,000 staff, but it is unlikely that any future partner would want to retain the entire payroll.
The privatisation of BDL is set to follow on from a successful CPA sale. ‘It is smaller than CPA, with capital of about AD 14,000 million [$190 million], so an adviser will probably not be necessary,’ says the banker. ‘And given the experience of privatising CPA, the process shouldn’t take longer than six months.’
The government has also decided to increase the capital of a number of public banks early in 2006. Candidates are understood to include: BDL, Banque Nationale d’Algerie
, Banque de l’Agriculture et du Developpement
and Banque Exterieur d’Algerie