AHLI UNITED BANK (AUB) ACQUIRES 49% STAKE IN COMMERCIAL BANK OF IRAQ, IRAQ’S LEADING PRIVATE SECTOR BANK
Ahli United Bank BSC (AUB), one of the region’s leading regional banking institutions, announced that it has completed the acquisition of 49% stake in the Commercial Bank of Iraq, one of the largest private banks in Iraq.
As a result of this acquisition, the capital base of the Commercial Bank of Iraq has increased to US$ 43.7 million from US$ 9.6 million. The Commercial Bank of Iraq was established in 1992. Since its inception, the Bank has performed consistently well and its total assets were ID 131 billion (US$ 89 million) and net profit were ID 1,927 million (US$ 1.28 million) as of 30 June 2005.
“The acquisition represents a significant step for Ahli United Bank and another important milestone in our strategy to become a major regional banking group.” said Fahad Al Rajaan, Chairman, Ahli United Bank.
“The economic potential for Iraq is tremendous. After years of economic isolation, the rebuilding of the country’s industry, infrastructure and oil sector will need considerable banking support. With an educated population, vast oil wealth and the opening up of the economy, Iraq is at the threshold of progress and development; as soon as the security atmosphere improves.” he added.
“Given the current security situation in Iraq, AUB will adapt a gradualist approach towards developing its presence and operations” Mr Al Rajaan said.
The Commercial Bank of Iraq, established in 1992, has 9 branches – 8 in Baghdad and one in Basra. The Bank provides commercial banking services and employs 364 persons. Its main branch and headquarters are located in the Al Andalus area of Baghdad. A new head office building is also under construction in Al Sadoun Street, a major commercial avenue in Baghdad.
“We are positive that the current security and operating environment will improve substantially, allowing the Bank to roll out a range of products and services to meet the requirements of both local customers and those of regional and international companies seeking to establish their operations in Iraq. We are committed to contributing in the development of Iraq and to investing in the country in the long term” said Al Rajaan.
He added “We are also fully aware of the limitations imposed by the present security situation and will tailor our plans accordingly.”
AUB has had a very successful year in 2005. The Bank announced a net profit of US$130.4 million for the period ending 30 September 2005, an increase of 53.4 percent over the same period in 2004 (US$85.0 million). The Commercial Bank of Iraq acquisition follows the increase in AUB’s stake in the Bank of Kuwait and the Middle East (BKME) to 75% in August 2005 and its inaugural US$ 100 million subordinated lower Tier 2 floating rate note issue completed in November 2005.