TBI can boast a wider global reach than other Iraqi banks, with an international network of 182 prime bank relationships in 52 countries. This gives it a stronger market presence than other banks for foreign businesses looking to pursue opportunities in Iraq’s still untapped market.

TBI is well positioned in a growth market where it estimates about 50 per cent of the country’s 31 million population is still outside the formal banking system and there are just 5 million bank accounts. Investment in technology has helped to maintain an edge over the competition, with the deployment last year of the Misys Equation system across its branch network enabling senior management in Baghdad to oversee branch operations nationally.

TBI has delivered strong profits since its inception. In 2010, it recorded an 18 per cent increase in profits to $361m.This was despite a drop of 31 per cent ($3.5bn) in LCs last year, blamed on political stalemate in Iraq.

The rise in profits mainly reflects growth in TBI’s investment portfolio, where it has undertaken a policy of diversifying into liquid investments, such as Central Bank of Iraq deposits, Treasury Bills and Iraq 2028 Eurobonds.

The policy of bolstering its balance sheet, with assets now standing at $15bn, appears sensible in the context of a still uncertain political and economic environment. It has focused strongly on increasing capitalisation, with the Central Bank of Iraq setting a deadline for minimum capitalisation above ID250bn ($b214m) by 2013. Capitalisation increased by 41 per cent in 2010 to $1.2bn – more than 10 times its original $102m capital at its 2003 founding.

TBI must still confront several challenges. Chief among these is the corruption probe initiated by Prime Minister Al-Maliki. Senior managers – including adviser to the board, Sir Claude Hankes, who formerly headed the UN Oil for Food programme in Iraq – see the investigation as politically motivated and linked to the unwillingness of senior management to do Baghdad’s bidding. The fact that the chairman has been temporarily replaced by Hamida al-Jaf, who previously worked for loss-making state bank Rafidain, suggests a strategy from Al-Maliki to extend the state’s grip on its most-effective and profitable bank.

If the bank can emerge from this crisis, it will still face formidable challenges. Perhaps the ultimate test of TBI’s success will be if it can increase lending to the private sector. Iraq’s economy is facing 10 years of sustained growth, as the oil company led investment programmes promise to double Iraq’s crude production and deliver a massive increase in revenues. If TBI can tap into the lending opportunities this investment drive will open up, it stands to reap the rewards of its early market presence.