International lenders did not disclose specificities, but said it was part of global cost-cutting plansNovember 26, 2015 11:32
Trade Bank of Iraq to launch private equity fund
Bank to open offices this year in London, Beirut.
March 3, 2011 2:32 by Reuters
A state-run Iraqi bank plans to set up a $500 million private-equity fund to invest in projects in the war-ravaged country and will next month look to identify a global player to act as the fund’s general partner.
Hussein Al-Uzri, president and chairman of Trade Bank of Iraq, said the bank aims to launch the private-equity fund this year, which will invest in medium-sized projects in industries including oil services, power and hotels.
The bank, set up in 2003, also plans to open branches this year in London and Beirut, and eventually aims to open offices in North America and east Asia, with China a possibility, as Iraq looks to attract investment to fund its rebuilding.
“Iraq will need major investment in infrastructure — in housing, oil, power, and so this will need capital investment into the country, and we are counting on the private sector, both Iraqi and foreign, to participate,” Uzri said in an interview.
Iraq expects private investment to triple to $30 billion this year, a senior government official told Reuters last month. [ID:nLDE7101VD] Overall, Iraq needs $600 billion of investment to rebuild, according to the National Investment Commission.
Launched in 2003, Trade Bank of Iraq has been widening its product offerings beyond trade finance and plans to add eight domestic branches this year to its current 15, Uzri said.
The bank had $15 billion in assets at the end of 2010, a level it aims to expand by about 15 percent this year. It earned net profit of $386 million last year, and is looking to grow that by about 20 percent in the current year.
Uzri, who was in the Indian capital for a global banking industry conference, declined to identify the firms on the short list to help manage the planned private-equity fund. The fund will look to raise money from investors.
“What we want is somebody that is of course recognised internationally but at the same time, that they would invest time and money in Iraq,” Uzri said.
“We want to make sure that for them, this is … strategic, they want to come here, they want to put people in, and time,” he said.
Security remains a concern for investors in Iraq, and Trade Bank of Iraq’s headquarters was devastated by a deadly bomb blast last year.
Still, Uzri said it has become much easier to pitch the Iraq investment story than during 2005-2007.
“Almost every day we have visitors from outside coming in,” he said.
Once a privatisation law is passed, the bank eventually intends to bring in investors to take a minority stake, with a foreign strategic investor a possibility, he said.
(Editing by Aradhana Aravindan)