A few days after the establishment of two new banks in Iraq, Iraqi investors have announced the formation of two more. The four private sector banks have a combined capital of US$100mn.
Al Mansour Investment Bank has a capital of ID55bn (US$36mn) and Tigris and Euphrates Development and Investment Bank has a capital of ID25bn.
An IPO of ID5bn was launched for Al Mansour and another of ID3.35bn for Tigris and Euphrates.
Al Mansour’s IPO represent only 9% of total capital, as for Tigris and Euphrates it represents 13.4%. These rates are considered low compared with the usual IPO volumes which most of the time represent 49% of capital leaving a majority share of 51% to the founders.
National Islamic Bank and Iraq Ashur International Bank (or Assyria International Bank) were founded some days earlier by Iraqi and other Arab investors based in UAE.
The anticipated number of new banks in Iraq may rise as more investments are expected to be pumped into the country whenever the security situation improves especially that only 20 banks with a combined capital of no more than US$1bn operate in Iraq now.
Iraqi bankers called on the government to take the necessary measures to allow the banks to carry out the most basic banking services such as documentary credits and to adopt banking standards similar to other banks in the region and abroad.
The chairman of the board of Basra Investment Bank, Ghaleb Kobba, has urged the banking sector to finance projects in the public and the private sectors, to establish joint investment funds and to invest in firms in the industrial as well as the agricultural sector.
For his part, Taleb Tabatabai, the chairman of the board of governors of the Iraq Stock Exchange (ISX), has called on the government to support the private banking sector, adding that there is a great need to establish joint stock companies in the productive sectors such as agriculture, industry, tourism and the like.