Bloomberg reports that Citigroup, the U.S. bank which earns about a $1 billion in revenue from the Middle East, has hired a former U.S. diplomat to oversee its team in Iraq as the holder of the world’s fourth-biggest oil reserves rebuilds its economy.
“We are very optimistic about Iraq over the next three to five years,” Dennis Flannery, who will run the division, said in an interview from Amman, Jordan yesterday. The country will have “considerable wealth” from its oil exports and is poised to invest in the oil and gas industry, power generation and housing to boost growth, he said.
Flannery, aged 64, was the financial attache at the U.S. embassy in Baghdad for a year before joining Citigroup in March. He has worked at the Inter-American Development Bank, the U.S. Treasury and the World Bank, and will oversee Citigroup’s plan to provide services to banks, international and state-owned companies in Iraq, the bank said in a statement. He will be based in Amman.
“Over the last year, Iraq’s security situation has improved very steadily,” Flannery said. Over a longer period, the lender may have “branches, a consumer business, a middle- market business” as well as a full-service bank in the country,” he said.
Citigroup already has some operations in Iraq, where it provides letters of credit for banks, private banking services as well as payment and cash-management services to international corporate clients.
It will seek to expand its trade finance and syndicated lending services to some of Iraq’s 44 public and private banks, he said. Citigroup is also in talks with the government to advise on finance projects in the oil, gas and power industries, as well as housing developments.
Citigroup will operate from Jordan for the moment, although it has options to open a representative office in Iraq, Flannery said. The New York-based lender could apply for a branch license or buy a stake in an existing bank, he said.
HSBC Holdings Plc, Europe’s largest bank, purchased a 75 percent stake in Baghdad-based Dar Es Salaam Investment Bank in 2005. Standard Chartered Plc and National Bank of Kuwait, the Persian Gulf country’s biggest bank, secured licenses to operate in Iraq in 2004, becoming the first group of overseas banks to enter the country since nationalization in 1964.