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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending

    Hkp1
    Hkp1
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    Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending Empty Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending

    Post by Hkp1 Thu 27 Jun 2013, 7:26 pm

    Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending


    By Stefania Bianchi - Jun 27, 2013 5:46 AM PT


    Citigroup Inc. (C), the U.S. lender scaling back in some emerging markets, said it’s seeking to benefit from an estimated $1 trillion of infrastructure spending in Iraq as the country rebuilds roads and bridges after the war.

    The third-largest U.S. lender by assets this week received approval to open a representative office in Baghdad and will also consider more such offices and branches in the country, Mayank Malik, chief executive officer for Jordan, Iraq, Syria and the Palestinian territories, said in a phone interview.


    Enlarge image Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending


    Iraq is the New York-based bank’s first country opening for six years and comes as Chief Executive Officer Michael Corbat seeks to sell or scale back consumer operations in nations such as Turkey, Pakistan and Uruguay, reversing an expansion strategy into faster-growing economies by former CEO Vikram Pandit.

    “Iraq is a giant that’s waking up and the opportunities are immense,” Malik said from Amman, Jordan. “The most significant opportunities are twofold -- oil revenue generation and infrastructure creation. We estimate this to be $1 trillion initiative over time.”

    Iraq, holder of the world’s fifth-largest proven oil deposits, is boosting budget spending by 18 percent this year to $118 billion. The International Monetary Fund forecasts the economy will grow 9 percent this year, the fastest pace after Libya of 18 countries in the Middle East and North Africa.
    Iraq Business

    Corbat, who replaced Pandit in October, announced last year that the lender would sell or scale back consumer operations in five nations including Turkey and Pakistan as part of a cost-cutting plan that will eliminate 11,000 jobs. In March, Corbat told attendees at a New York conference he might exit businesses in 21 more countries, which he didn’t identify.

    Business in Iraq will come from international companies looking to rebuild roads, telecommunication networks, electricity and water infrastructure amid continuing violence in the country, Malik said.

    Iraq’s stock exchange drew investors in February when mobile operator Asiacell Communications PJSC listed after a $1.3 billion share sale, in the Middle East’s biggest initial public offering since 2008. The country’s two other mobile operators, Zain Iraq and Korek Telecom, plan to sell shares in IPOs to comply with their license requirements.

    “The economic story of Iraq hasn’t changed,” Malik said. “Iraq is the only country that has economic stability and political instability.”
    StanChart Entry

    Foreign banks were barred from the country until after the U.S.-led invasion that ousted the regime of Saddam Hussein. Today, 15 international banks operate there, competing with seven state banks, 23 private lenders and nine banks operating under Islamic rules, according to the central bank’s website.

    Banks in the country are set for growth in earnings and assets as a surge in lending in OPEC’s second-biggest producer outpaces the region. Iraq’s rising oil exports and a drop in the prime lending rate to 6 percent from 17 percent in 2008 are feeding the expansion.

    The five largest privately owned banks boosted their combined net income by 207 percent from 2010 to 2012 and more than doubled earnings per share, according to Singapore-based Sansar Capital Management LLC, which runs a fund with $30 million invested in Iraqi equities. The country has one ATM for every 100,000 residents, compared with a regional average that’s 32 times higher, according to Sansar’s report.

    Standard Chartered Plc has said it will open branches this year in Baghdad and the city of Erbil, followed by a third office next year in the oil hub of Basra.
    HSBC Exit

    As Citigroup and Standard Chartered enter the country, HSBC Holdings Plc (HSBA), Europe’s biggest bank, said June 25 that it may sell its 70 percent stake in Iraq’s Dar Es Salaam Investment Bank following a strategic review. HSBC will explore options for a sale and won’t subscribe to shares of the investment bank as part of its proposed capital increase, it said. HSBC bought the stake in 2005.

    Iraq has seen an upsurge in violence since the U.S. withdrew its last combat troops at the end of 2011, reflecting tensions between Sunni Muslims and the country’s Shiite-led government. Terrorists killed more than 1,000 civilians and security forces in the country in May, surpassing the 712 killed in April, which was the deadliest month since June 2008, the United Nations mission to Iraq said in June.

    “The political backdrop may cause some delay or distraction, but the economic fundamentals of Iraq haven’t changed,” Citigroup’s Malik said.

    To contact the reporter on this story: Stefania Bianchi in Dubai at [You must be registered and logged in to see this link.]

    To contact the editor responsible for this story: Dale Crofts at [You must be registered and logged in to see this link.]


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