Warka Bank, the Iraqi bank that was meant to be delisted from the Iraq Stock Exchange (ISX), has been given a two-month extension by the Iraq Securities Commission (ISC) to increase its capital.

ISX made the decision to delist the bank on 29 October 2011, having been suspended from trading since 8 February 2010 for failing to meet the minimum capital requirements. It has not traded since.

On 20 December, the ISC issued a notice to Warka stating that it had two months remaining to raise money to return to depositors.  

“Warka Bank is a listed company. The ISC sent them a warning letter [saying] that they must finish all its applications to the Companies Registrar and get back to the ISX to be able to trade within two months. They will be delisted if they do not work hard to solve their problems,” says Taha Abdul Salam, chief executive officer of the ISX.

The lack of coherency highlights the lack of consensus between the two bodies. According to the ISC, the ISX does not have the power to delist a company. According to Iraq-based brokerage firm Rabee Securities, the letter from the ISC indicates that Warka is currently suspended from trading and not delisted. The ISC suggests to Warka in its letter to sell some of its fixed assets and recall large loans to fund its liquidity gap.

Warka’s inability to solve its liquidity issue has crippled the bank. The UK’s Standard Chartered was in talks for a possible takeover of the company, but negotiations have since soured. Standard Chartered already has an Iraqi banking licence and does not need an acquisition in order to enter the market.

Neither Warka or Standard Chartered were available to comment.