Abu Dhabi Islamic Bank (ADIB) is the latest lender after JPMorgan, Citi and Standard Chartered to expand business in Iraq as the oil-rich country boosts crude production and rebuilds its infrastructure.
ADIB, the only UAE lender to operate in Iraq, plans to open a branch in Basra before the end of the year after it opened a branch in Erbil in October. The bank obtained a licence from Iraq's central bank in 2010 and opened its first branch in Baghdad shortly after.
There are still plentiful opportunities that Arabian Gulf lenders can take advantage of, says Jaap Meijer, the head of research at Arqaam Capital, an investment bank in Dubai.
“Lenders can open subsidiaries or enter the market through acquisitions of existing banks with established networks,” Mr Meijer said. “For example, Dar es Salaam Bank, in which HSBC is looking to divest its stake, we believe is a potential takeover target for one of the GCC banks.”
Iraq’s economy is expected to grow by 6.3 per cent this year, up from 3.7 per cent growth last year, according to the IMF.
The country, which is Opec's second-largest producer, raised its crude oil production by 530,000 barrels per day (bpd) last month to 3.6 million bpd. The figure is the highest since 1979.
The country plans to boost its output to 4.5 million bpd this year.
“With Iraq rebuilding its economy through investing in its infrastructure, energy and industry, we are seeing growing demand for our banking services, from foreign companies doing business in Iraq as well as from local companies that are looking for capital and world class services,” ADIB said.
“We are in the process of extending our branch network and launching a new consumer banking solution that includes long-term deposits accounts, auto finance and property finance in the near future.”
In 2003, JP Morgan helped to set up Trade Bank of Iraq (TBI), the biggest lender in the Iraq and the first to receive lines of credit with international banks after the removal of Saddam Hussein from power. In July, JPMorgan said it would expand its business in the country and signed a one-year agreement with TBI to finance imports of goods and services through letters of credit.
Citigroup set up an Iraq equities desk operating out of Amman two years ago. The bank in June said it planned to open a representative office in Baghdad and branches in Basra and Erbil to capitalise on the country’s oil boom.
“The branches would help provide liaison functions for Citi’s clients globally and contribute to the development of Iraq’s banking and capital markets,” it said at the time.
Several foreign banks – including Capital Bank of Jordan, HSBC, National Bank of Kuwait and Ahli United Bank of Bahrain – have already set up in Iraq, but they have entered through partnerships with local banks.
In the past, foreign banks shied away from opening branches under their own names because of security concerns. ADIB is only the second foreign bank to enter the market by starting a branch from scratch rather than through a partnership. The first foreign bank to do so was Byblos Bank of Lebanon.
ADIB “is already a fully fledged corporate and consumer bank in Iraq, providing cash management, trade [letters of credit and guarantees] and foreign-exchange services,” it said.
The lender’s expansion in Iraq is part of a larger strategy to grow its international network, which includes branches in the United Kingdom, Egypt, Qatar, Saudi Arabia and Sudan.
In February, the bank reported a fourth-quarter net profit of Dh343.3 million, exceeding analysts’ estimates and rising significantly from Dh242.8m a year earlier. Analysts polled by Bloomberg News had forecast the bank to post a profit of Dh321.3m. The shares jumped 9.3 per cent after the results were released. The first-quarter earnings season is expected to commence next month.
Iraq remains a fragile state and security risks can never be understated. More than 400 people have been killed so far this month and more than 2,000 have died in attacks since the start of the year, according to tallies by Agence France-Presse.
“Security risks always need to be considered, but we believe economic development will help to stabilise the country,” ADIB said.
“In a frontier market such as Iraq, financial institutions need to be particularly alert to a wide range of financial and legal risks. We hope the modernisation of the legal framework will allow for better financing structures and encourage financial institutions to underwrite more risks while protecting themselves.”
halsayegh@thenational.ae
Follow us on Twitter @Ind_Insights
SERIES INFO
Afghanistan v Zimbabwe, Abu Dhabi Sunshine Series
All matches at the Zayed Cricket Stadium, Abu Dhabi
Test series
1st Test: Zimbabwe beat Afghanistan by 10 wickets
2nd Test: Wednesday, 10 March – Sunday, 14 March
Play starts at 9.30am
T20 series
1st T20I: Wednesday, 17 March
2nd T20I: Friday, 19 March
3rd T20I: Saturday, 20 March
TV
Supporters in the UAE can watch the matches on the Rabbithole channel on YouTube
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Details
Through Her Lens: The stories behind the photography of Eva Sereny
Forewords by Jacqueline Bisset and Charlotte Rampling, ACC Art Books
SQUADS
South Africa:
JP Duminy (capt), Hashim Amla, Farhaan Behardien, Quinton de Kock (wkt), AB de Villiers, Robbie Frylinck, Beuran Hendricks, David Miller, Mangaliso Mosehle (wkt), Dane Paterson, Aaron Phangiso, Andile Phehlukwayo, Dwaine Pretorius, Tabraiz Shamsi
Bangladesh
Shakib Al Hasan (capt), Imrul Kayes, Liton Das (wkt), Mahmudullah, Mehidy Hasan, Mohammad Saifuddin, Mominul Haque, Mushfiqur Rahim (wkt), Nasir Hossain, Rubel Hossain, Sabbir Rahman, Shafiul Islam, Soumya Sarkar, Taskin Ahmed
Fixtures
Oct 26: Bloemfontein
Oct 29: Potchefstroom
THE SPECS
Engine: 6.0-litre, twin-turbocharged W12
Transmission: eight-speed automatic
Power: 626bhp
Torque: 900Nm
Price: Dh1,050,000
On sale: now
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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UAE currency: the story behind the money in your pockets
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
COMPANY PROFILE
Name: Grubtech
Founders: Mohamed Al Fayed and Mohammed Hammedi
Launched: October 2019
Employees: 50
Financing stage: Seed round (raised $2 million)
MATCH INFO
Who: France v Italy
When: Friday, 11pm (UAE)
TV: BeIN Sports
Third Test
Day 3, stumps
India 443-7 (d) & 54-5 (27 ov)
Australia 151
India lead by 346 runs with 5 wickets remaining
The years Ramadan fell in May
The bio
Studied up to grade 12 in Vatanappally, a village in India’s southern Thrissur district
Was a middle distance state athletics champion in school
Enjoys driving to Fujairah and Ras Al Khaimah with family
His dream is to continue working as a social worker and help people
Has seven diaries in which he has jotted down notes about his work and money he earned
Keeps the diaries in his car to remember his journey in the Emirates
box
COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
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