CBI is one of Iraq's largest private banks and has a network of nine branches, eight in Baghdad and one in Basra. Other prominent shareholders include the Al-Kubba and Al-Bunia families. 'We will adopt a gradualist approach to expansion in light of the security situation,' AUB chief executive officer Adel el-Labban told MEED on 13 December. 'First we will try to upgrade technical and human capabilities within the existing network. The only possible area for geographical expansion in the near term is the northern Kurdish region. Acquiring a retail client base is our main immediate priority, although we are also keen to capture some of the contractor financing opportunities on offer and to develop relationships with some of the high-net-worth trading families.' CBI's management will be a combination of existing staff and secondees from AUB.

AUB was granted permission for a branch in Iraq in the second wave of foreign bank licences awarded by the interim authorities. 'We decided that the best way to enter was not through a greenfield operation but through an acquisition where there is physical and human infrastructure already in place,' said El-Labban. It is a strategy that has been adopted by other banks entering Iraq, including HSBC, National Bank of Kuwaitand United Gulf Bank(MEED 18:11:05).

AUB's strategy more broadly is to expand through acquisitions, as it has already done through stakes in Bank of Kuwait & the Middle Eastand International Bank of Qatar. 'We have not applied for a [branch] licence in Saudi Arabia, while at current valuations an acquisition is not viable,' said El-Labban. The bank is present in Iran through Future Bank, a joint venture with Bank Melliand Bank Saderatwhich has a licence to operate offshore from Kish island. 'We plan to start operations in early 2006,' said El-Labban. 'There is little difference to what we are allowed to do from onshore banks - the constraint is the location.'

AUB was in the running to acquire Misr International Bank earlier in the year, but lost out to National Societe Generale Bank. 'We are frequently approached about opportunities in Egypt and Lebanon,' said El-Labban. 'However, these are secondary markets for us. Our primary focus is the Gulf.'