Français/English - Arab Banking Corporation, ALGERIA

Letter from the Chairman
of the Board
Sluggish world growth...
At the end of 2012, the economic climate is still affected by
several major uncertainties, the number one being the fiscal
cliff in the USA and the developing sovereign debt crisis in the
eurozone, not to mention the political events in North Africa
and the Middle East. In addition to the developing sovereign
debt crisis in Europe, recent tensions which have affected oil
prices, particularly enhanced by geopolitical uncertainties in
North Africa and the Middle East, comprised a risk for growth,
considering that business has significantly dropped in most
emerging economies, with performances which have slowed
down more or less due to inflationary causes.
Algeria The price of Brent is on the up!
Growth should remain solid in the short term, supported
by high oil prices, high domestic demand and a booming
economy excluding hydrocarbons. World oil prices, which were
on average around USD109.55 a barrel in 2012, compared to
USD107.46 in 2011 and USD77.45 in 2010 have compensated
for the reduced demand for energy exports and have reinforced
Algeria’s financial position.
In addition, the country’s foreign currency reserves, at
the end of 2012, amounted to USD190.7 billion compared
to USD182.2 billion in 2011, creating a financial cushion for
public expenditure programmes. Furthermore, the current
balance of payments surplus was 8.2% of GDP at the end of
2012, but is likely to drop in 2013 to 7.1% due to larger public
investments. As well as wishing to boost growth in sectors
excluding hydrocarbons of its economy, one of the major
priorities of the Algerian Government in 2013 will be to bring
inflation to the recommended level of 4% to 4.5% whereas
it was 8.9% in 2012. Although the country is still dependent
on revenue from the oil and gas sectors, which still represent
97% of all exports and contribute up to 30% to GDP, in 2012,
these sectors underwent encouraging changes which helped
to ensure comfortable returns and capital in the medium term.
Algeria has announced its plan to invest USD80 billion in the
energy sector over the next five years to reinforce production
and exploration.
ABC Algeria: 2012, all systems go
Also and in this rather favourable context, 2012 for our bank
was marked by improved profitability levels, thus reassuring us
in the decisions made. Reinforcing its position among the major
players on the national and also regional financial landscape,
our bank thus recorded net improvements of all its performance
indicators. The total balance sheet reached DZD47.313 billion,
i.e. a 13% increase, thanks to the combined increase in
deposits and loans to customers. As for total operating income,
it increased by 31% to DZD3.191 billion, whereas net profit was
DZD1.313 billion, up by 44%.
This development clearly shows the dynamism and
commitment of all business segments of the bank, supporting
us in a rigorous management and cost control approach
particularly in view of satisfying our customers.
At the same time, ABC Algeria was awarded best bank in Algeria
for the fourth consecutive year by Global Finance thanks to the
combined expertise of its different teams.
In 2012, we increased our range of products, particularly with
regard to property; indeed our “Soukna” range today has
new sub-products including, in particular, the mortgage-free
arrangement, construction/extension loan and the land purchase
products, available across our banking network which has grown
with the opening of 5 new points of sale, with a total of 23
branches operational across the country.
This year will have also seen the implementation of the first
phases of the major structuring projects of the blueprint for
the bank’s information systems. Thus, the TRADE INNOVATION
solution, which is a reference solution for processing Trade
Finance business, has been implemented for the part of Import
Letters of Credit. Boosted by this success, in 2013 we will also
have to use this solution for processing Documentary Collection
and Guarantees (Local and International Guarantees).
In parallel to the review of internal governance and the
organisation of the various business lines of the bank, this year,
we created the Permanent Control Division, in order to get
a better understanding of the everyday risks related to bank
transactions.
Furthermore, ABC Algeria has brought all its central departments
together in a new building, near the historic headquarters of ABC
Bank, which will enable all our teams to continue the efforts made
to date in a spirit of constructive collaboration.
We therefore overcame a major stage in the life of ABC Algeria in
2012, making the ambition of our development project a reality.
And it is with renewed impetus that we are starting the financial
year 2013, with the support of recognised and above all devoted
teams, with the intention to consolidate the foundations of our
strategy and looking to grow to the benefit of our shareholders,
customers and above all our employees; and it is indeed to them
that we are dedicating this year’s success.
Ali Salem Hebri
The Chairman of the Board of Directors
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