US-owned Citibank is planning to develop Jordan into a regional hub to better service its expansion plans into Iraq. The company recently signed a strategic partnership with Kuwait-owned Bank of Baghdad as a way to establish a presence in the country.
“Iraq is a huge emerging market and a very substantial and compelling opportunity. It will take time to build and develop and will keep us engaged for a long time,” says Citibank’s chief executive officer of Jordan and Iraq, Mayank Malik.
Citibank has no plans to acquire Bank of Baghdad, but the partnership works as a gateway for Citibank to serve its multinational clients looking to move into Iraq. It is also planning to work with the public sector and the Iraqi government, the country’s largest employer.
“It is a win-win situation for both of us,” says Malik. “Bank of Baghdad is one of the progressive banks. It has invested in training, has a local presence and the infrastructure in place and Citibank brings its global expertise.”
The Iraqi operations will be run from the Amman office, headed by ex-US diplomat Dennis Flannery. As Citi’s business expands in Iraq, the bank is likely to consider a physical presence in the country.
Citibank has selected Jordan as a hub for the region due to the higher political and economic stability compared with neighbouring countries. It is looking to expand its portfolio and footprint in the country and acquire more clients over the next three to five years.
While there have been protests in Jordan, the country has been more stable and was not as badly affected during the financial crisis, but it is not distanced from other developments in the region.
Without any oil or gas wealth to fall back on, the government is under pressure to maintain fiscal and monetary stability. It faces challenges in increasing economic activity in the country and attracting investors to drive growth.
According to Malik the ease of doing business and setting up new businesses in Jordan “needs work and still has a way to go”.