Best Trade Bank in the Middle East: Trade Bank of Iraq

Runner-up: Arab Banking Corp
Commended: Deutsche Bank
2007 Winner: Trade Bank of Iraq

It is probably fair to say that the reconstruction of Iraq – now in its fifth year – could have been handled much better, especially in the early years.

However, the Trade Bank of Iraq (TBI) has impressed since it was established in November 2003. In the last year, it increased its branch network to eight to improve its geographic coverage and, with Iraq’s economy growing strongly, it is also playing an increasing role supporting the development of the private banking sector, too.

For example, in the first half of the year, TBI was able to channel 65% of public sector letters of credit to private sector banks. That compares with 28% in 2007 and 7.4% in 2006 and reflects the rapid development of the banking sector in Iraq, not just in terms of size and capitalisation, but expertise as well.

“We believe that an empowered Iraqi private banking sector is the key to a healthy Iraqi economy,” says Zaid Mahdi, Vice President – Business Development, at TBI. In addition, staff numbers are growing all the time and corporate governance has been improved, says Mahdi.

The growing strength of Iraq’s banking sector, backed by the Trade Bank of Iraq, has enabled reconstruction to gather pace. For example, recently completed upgrades to the Erbil power plant will enable the whole of Iraqi Kurdistan to enjoy an electricity supply around the clock in a project financed entirely by Iraqi investors – facilitated with finance provided by TBI.

The Bank does not – yet – participate in structured trade finance. Instead, it is focused on improving the business environment, and encouraging and facilitating foreign inward investment.

Fortunately, the credit crunch that has blighted banking in Europe and the US is a mere detail in Iraq. As a country enjoying the benefits of a high oil price and expected to register continuing strong growth for the foreseeable future, the country has become highly attractive to outside investors looking for high returns in an increasingly stable environment.

“We are seeing encouraging signs with investors increasingly considering serious investments in Iraq with private equity and hedge funds willing to have Iraqi assets as part of their portfolio.

“Iraq has, without doubt, become a more attractive place to invest and the reality today is that Iraq is a land of opportunity for foreign investors. Trade Bank of Iraq is encouraging inward investment that will help develop the infrastructure of the country and support a healthy economy,” says Mahdi.

Trade Bank of Iraq will continue expanding, too, and investing in staff and its banking infrastructure, which can continue at speed as the country becomes more peaceful.

“A new branch opened in Najaf on 12 July, taking the total number of branches to eight. The number of the staff there is 28 and the branch includes the first automated teller machine (ATM) in the city. An ATM at Najaf International Airport was also installed by TBI on the 20 July,” says Mahdi.

The installation of cash machines is significant: if TBI feels that they can be installed and supplied in safety, then that reflects genuine progress in the country – and TBI has arguably played a big part in that success.

“TBI aims to continue to support, in an effective and transparent manner, the development of the financial sector throughout Iraq. We know that, in the long-run, the most effective security solution is economic growth and job creation, and this is where we are headed. We face the future with confidence,” says Mahdi.

“Iraq is a land of opportunity for foreign investors. Trade Bank of Iraq is encouraging inward investment that will help develop the infrastructure of the country and support a healthy economy.”

Zaid Mahdi, Trade Bank of Iraq