Out of the 21 private banks listed on the Iraq Stock Exchange (ISX), 13 of them have failed to meet the Central Bank’s end-June deadline to raise their capital to ID100bn ($86m).

All 13 banks have been suspended from trading prior to their annual general assembly meetings (AGM) to increase their capital.

Already two mergers have been announced. It is likely that more of the banks will seek to merge with local or foreign banks rather than attempt to generate capital internally.

HSBC’s Dar Es Salaam is the largest private bank and on 7 June the UK bank announced it would subscribe fully to Dar Es Salaam’s 46.9 per cent rights issue.

United Bank has already reached the second target capital of ID150bn set for mid-2012.