Banking on security in Baghdad

Business Materials 29 June 2009 12:42 (UTC +04:00)

Under the watchful eye of a guard in army fatigues -- with badges depicting a dagger through a skull -- the meeting of the Iraqi private banks association was like any gathering of mostly fat and balding money men,reported Reuters.

Observed by the guard clutching a rifle in the corner, men in suits argued about how to encourage growth in Iraq's long-moribund finance sector, where the "green shoots" of security have drawn bankers out from behind the barricades.

"The security now is better than one or two years ago ... I go out as an Iraqi citizen because I'm proud of my country, regardless of bombs or terrorism," said Abdul-Hussein al-Rabaie of Iraq's Al-Bilad Islamic Bank for Investment and Finance.

Happily for the men at the heavily guarded meeting -- bankers are prime kidnap targets in Iraq -- their patriotism has coincided with bumper profits.

Bankers at the get-together spoke of a surge in deposits and loans in the past two years as the violence that gripped Iraq after Saddam Hussein's fall in 2003 began to subside, revenues from record oil prices flowed in and government salaries rose.

Banks are among the top picks on Iraq's nascent bourse.

Total bank deposits in February -- the latest figures available -- jumped by half to 36.6 trillion Iraqi dinars ($31 billion) from a year before, and loans surged 65 percent to 5.1 trillion dinars over the same period, central bank data show.

The figures are tiny by international standards, but even global banking giant HSBC sees bigger things to come in Iraq, home to the world's third-largest oil reserves and desperate to rebuild after years of war.