Algeria

Algeria's banking system is dominated by seven public banks – BEA, BNA, CPA, BDL, BADR, CNEP and the housing bank BNH – which operate alongside 14 foreign-owned banks and branches, mainly of French, Bahraini and Jordanian groups, according to the Bank of Algeria's February 2026 list of 21 licensed banks. Deposit takers' total assets reached DZD 24.6tn (about US$190bn) at end-2025, equivalent to roughly two-thirds of GDP. Crédit Populaire d'Algérie, one of the public banks listed on the Algiers exchange, reported total assets of DZD 3.2tn and net profit of DZD 48.2bn for 2025.

Banks are highly liquid, with liquid assets equal to 38.6% of total assets at end-2025 according to IMF data, and lending growth has been moderate: credit to the economy rose 5.4% in the first half of 2025. The fiscal-monetary nexus is strong. Bank of Algeria holdings of state-issued or state-guaranteed securities reached DZD 8.2tn in November 2025, and the Finance Minister acknowledged recourse to unconventional central-bank financing of the budget that month. Currency in circulation of DZD 9.7tn underlines the economy's continued reliance on cash.

Headline capital and profitability are sound, but asset quality is weak. IMF Financial Soundness Indicators show a regulatory capital ratio of 23.5% and a Tier 1 ratio of 20.1% at end-2025, with a return on assets of 1.6% and return on equity of 12.2%, up from 9.8% in 2024. Non-performing loans, however, were 20.1% of gross loans, only marginally below 21.0% a year earlier. The IMF's 2026 Article IV assessment judged banks' liquidity, capital and profitability buffers adequate.

The main vulnerabilities stem from hydrocarbon dependence and budget financing needs. The IMF projects gross official reserves falling from US$51bn at end-2025 to US$46.5bn in 2026 and US$19.8bn by 2031 under current policies, and has called for greater exchange-rate flexibility given a parallel-market premium of around 80%. Policy is supportive of credit: the key rate was cut to 2.75% and the reserve requirement to 2% in August 2025, and ceilings on lending rates were tightened in June 2026.