Banque Numide Algerie

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	26339
Company name	Banque Numide S.p.A
Country	Algeria
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Pending Disbursement

Date SPI disclosed	February 27, 2008
Projected board date	March 28, 2008
Previous Events	Signed: April 23, 2008 Approved: April 15, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The proposed project consists of an up to DZD1 billion (approximately EUR10 million) equity investment for the establishment of a greenfield banking institution in Algeria, with a focus on retail banking, namely residential housing finance, along with Groupe Caisse d’Epargne of France and Cevital of Algeria. The purpose of this project is to expand access to financial services to segments that remain underserved by the banking sector. It is expected after 5 years of operations that the institution will have up to 90 branches and over 440,000 private resident clients.

Project sponsor and major shareholders of project company

The project sponsors are Groupe Caisse d’Epargne of France through two of its subsidiaries, Financière Océor and Crédit Foncier de France, and Cevital of Algeria.

Groupe Caisse d’Epargne is one of the largest French banking groups with total assets, equity and net profit of EUR537 billion, EUR20 billion and EUR3.8 billion respectively at year-end 2006, and is active in domestic and international retail banking, corporate and investment banking, insurance and asset management. Financière Océor is the international commercial banking pole of Groupe Caisse d’Epargne, with total assets, total equity and net profit of EUR6.7 billion, EUR456 million and EUR24 million respectively at year-end 2006. Crédit Foncier de France is Groupe Caisse d’Epargne’s housing finance subsidiary and is the largest specialist institution in the French housing finance market. Crédit Foncier de France had total assets, total equity and net profit of EUR94 billion, EUR2.5 billion and EUR369 million respectively at year-end 2006.

Cevital is a diversified industrial and commercial company with interests in agribusiness, construction, floats glass industry, electronics (Samsung) and car and trucks distribution (Hyundai). Cevital is the largest private sector company in Algeria with revenues, equity and net income of approximately $1.6 billion, $1.1 billion and $300 million respectively at year-end 2007.

Total project cost and amount and nature of IFC's investment

The total project cost is DZD10 billion (approximately EUR100 million) in equity over the next five years, including an up to DZD1 billion (approximately EUR10 million) investment for IFC’s own account for an up to 10% stake.

Location of project and description of site

The institution will be headquartered in Algiers and over five years aims to have 90 branches in and around the cities of Algiers, Annaba, Blida, Constantine, Oran, Tizi-Ouzou and Setif.

Anticipated development impact of the project

With this project, IFC is expected to make a high impact contribution to access to finance in Algeria.

- Direct Contribution to Economic Development:

The level of financial intermediation in Algeria, especially to the private sector, remains too low to provide sufficient support to economic growth. By being a founding shareholder of the new institution, IFC will support the expansion of banking services as well as lending to individuals and to SMEs.

- Significant Contribution to Poverty Reduction:

Although more and more banks are interested in lending to the private sector in Algeria, SMEs and private individuals current financing needs are currently not met by the financial system. Retail lending, especially for mortgages given limited access to long-term funds and expertise, is also constrained. Expanding of financing available for these two market segments will directly contribute to employment generation and wealth creation in the economy.

IFC's expected development contribution

IFC will play a key institution building role in supporting the creation of a greenfield retail institution that will provide access to finance to individuals, namely for mortgages, and to micro and small enterprises in Algeria.

Environmental and social issues - Category FI

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

Based on IFC's investment and the activities proposed to be supported by the Bank the Applicable Performance Requirements are:

- The IFC FI Exclusion List; and
- The applicable Algerian National Social and Environmental Laws and regulations.

The Bank will be required to:

- Develop a Social & Environmental Management System (SEMS) or commit to an SEMS Plan detailing time bound actions related to the establishment of an SEMS, prior to disbursement, to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.

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