INDEPENDENT NEWS

Cablegate: Jordan's Export and Finance Bank Is First Investor

Published: Thu 22 Jan 2004 03:25 PM
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS AMMAN 000579
SIPDIS
TREASURY FOR A. DEMOPULOS
PASS EXIMBANK FOR ROBERT BOSCO
E.O. 12958: N/A
TAGS: EFIN JO IZ
SUBJECT: JORDAN'S EXPORT AND FINANCE BANK IS FIRST INVESTOR
IN IRAQI BANK
REF: 03 AMMAN 793
1. Jordan,s private Export and Finance Bank (EFB) signed an
agreement January 17 to purchase 49 percent of the private
National Bank of Iraq (NBI) for US $8.5 million. It is the
first foreign bank to take a stake in an Iraqi bank since
regime change. According to EFB Chairman Ali Al-Husry in a
meeting prior to the sale, NBI,s paid-up capital only
amounted to $6-7 million; with the addition of EFB's
investment, its capital stock would be roughly $15 million.
NBI,s tiny capitalization is very large relative to other
Iraqi private banks; as of mid-December, it was the only
Iraqi bank with more than $5 million in paid-up capital. EFB
will have management control of NBI and has already sent
employees to Baghdad and is training Iraqi NBI employees in
Amman.
2. EFB, generally regarded as a relatively innovative and
aggressive Jordanian bank, was founded in the late 1990s, and
has found a niche serving Jordan,s Qualifying Industrial
Zones (QIZs). Unlike some (but not all) other Jordanian
banks, several of which have faced difficulties in the recent
past as a result of overexposure to the property market and
to the Shamaileh scandal (reftel), EFB has seen strong growth
and is now the fifth-largest Jordanian bank in terms of
market capitalization (US $200 million).
3. With experience operating in Iraq prior to regime change,
EFB seems to have a relatively high comfort level with the
Iraqi market. In August 2003, it was the first bank to set
up a wire transfer service between Jordan and Iraq. In a
meeting with Ex-Im Bank First Vice President April Foley
January 13, Husry expressed avid interest in partnering with
Ex-Im Bank to expand availability of funding for Iraqi
reconstruction projects, notably in the electricity sector.
Several other Jordanian banks, most prominently including the
Arab Bank, are exploring entry into the Iraqi market.
GNEHM
View as: DESKTOP | MOBILE © Scoop Media