The UK’s Standard Chartered is in the final stages of taking over delisted Iraqi bank Warka Bank for Investment & Development, according to its executive director Mohammed al-Samarrai.
Al-Samarrai told Hayat newspaper on 19 August that an acquisition would put Warka in a very strong position and gives it the ability to finance major projects. He said the integration of the bank with a foreign corporation will increase the confidence of its customers, the government and the Central Bank of Iraq.
Standard Chartered refused to confirm whether the Al-Samarrai’s statements were true, but did not deny that there have been talks between the two parties. A source at Standard Chartered told MEED that the bank continues to have an interest in Iraq.
Iraq banking sector
- Total of 49 banks
- 7 are state-owned
- 42 are private banks
- 7 of the private banks are foreign subsidiaries
- 12 of the private banks are Islamic banks
Standard Chartered first showed an interest in Warka four months ago. It is Iraq’s largest private bank in terms of network and infrastructure with 130 branches and 360 automated teller machines (ATM) across the country.
“We have been interested in Iraq and the wider region for some time and in some cases like Iraq, a merger or acquisition is better than trying to obtain a licence,” says the source.
The deal would enable Warka to raise its capital to the minimum ID100bn, which will rise to ID250bn ($214m) by 2013.
The Trade Ministry delisted Warka from the Iraq Stock Exchange (ISX) for failing to reach the required capital levels and seized the bank’s 98 million shares, after a year of no trading. A takeover by Standard Chartered would provide the Iraqi bank sufficient capital to enable it to be listed again.
Warka bank was not available for comment.
Standard Chartered is still carrying out the due diligence process for Greek bank Piraeus’ Egyptian subsidiary, which began 27 July.
“We studied the Egyptian market and realised the best way to penetrate it was an acquisition, because the Central Bank has stopped issuing licences,” says a Standard Chartered spokesperson.