ABU DHABI (Reuters) - Trade Bank of Iraq (TBI) is in talks to buy a Gulf bank with branches in the United Arab Emirates and Qatar as part of a strategy to boost revenues outside its home market, its chairman said on Wednesday.
The talks are underway and the purchase is expected to be completed in six to eight months, Faisal al-Haimus told Reuters. He did not disclose the name of the bank.
The move comes after TBI said in August it had put on hold its plans to buy a commercial bank in Turkey due to the weak lira.
The bank, owned by the Iraqi government and with assets of around $20 billion, helps fund around 80 percent of the trade finance business in Iraq.
TBI will open its first overseas branch in Saudi Arabia in the first quarter of 2019, having got the required approvals. The branch will focus on trade finance but will do some corporate business too, Haimus said.
The branch in Riyadh will have around 45 staff.
“Trade between the two countries is growing strongly and can double by 2019,” Haimus said. Currently, trade between Iraq and Saudi Arabia is about $1 billion.
TBI has 25 branches in Iraq and a representative office in Abu Dhabi.
Haimus was in Abu Dhabi to sign a 100 million euros ($115.5 million) loan agreement for financing loans with Commerzbank (CBKG.DE) to enable it to support small and medium sized projects in Iraq.
TBI aims to back public and private sector projects, it said in a statement and the focus of the financing partnership will be on export contracts awarded to clients of Commerzbank in Germany and other European countries.
The bank continues to look at other opportunities to grow and bolster revenues of $757 million in 2017.
“This year, because of diversification of our business from only trade finance to retail and investment banking, we expect higher revenues,” Haimus said.
Last week, the bank launched an investment fund in Iraq, targeting corporate clients and high net-worth individuals. The $25 million fund will be raised to $100 million to target investors across the Gulf, he added.
TBI is also in talks with Iraq’s State Oil Marketing Co to undertake hedging facilities for Iraqi oil, he said.
($1 = 0.8658 euros)
Reporting By Stanley Carvalho; Editing by Elaine Hardcastle