Iraq’s Ashur International Bank decided to pursue a merger with Mosul Bank and Union Bank of Iraq after its annual general meeting (AGM) on 22 June.

The bank’s board of directors will now make a bid for the merger and hopes to enter talks with Mosul Bank, which is currently in the process of merging with Union Bank after agreeing to do so on 25 May this year.

The combined market capitalisation of the three banks put together will be ID140bn ($120m).

If the merger is not agreed, then Ashur International Bank will look to increase its capital with a 36.6 per cent rights issue and a 10 per cent bonus issue from ID50bn to ID100bn, the minimum capital required for Iraqi banks by the end of June this year to satisfy the Central Bank of Iraq.

The bank’s board of directors will now make a bid for the merger and hopes to enter talks with Mosul Bank

The Mosul Bank and Union Bank merger was a first for the Iraqi Stock Exchange (ISX) and this three-way merger will be another record-breaker if it goes ahead. Both mergers have not received approval from the Central Bank of Iraq or the Companies Registrar.

““The merger of two banks is not an easy task anywhere. To merge three would be an  astronomical task in Iraq,” says Shwan Ibrahim Taha, chairman, Rabee Securities, a brokerage firm based in Baghdad.

The banking sector is the largest on the ISX and makes up about 80 per cent of trade volumes daily.