The Iraqi state-run Trade Bank of Iraq (TBI) has recovered around $400 million of a $900 million default on loans handed out with little or no security by the previous management, the bank’s new chief has said.
Former TBI president Hussein al-Uzri fled Iraq in early June after Prime Minister Nuri al-Maliki ordered a judicial inquiry into the bank when a committee that including officials from the anti-corruption commission and audit authority reported financial violations.
In a Reuters interview, Uzri said the allegations were fabricated and called himself a victim of a power grab by people close to Maliki.
Arab News says the scandal cast a shadow over the TBI, which foreign investors regarded as a success story in a country recovering from years of economic sanctions and war following the US invasion in 2003.
New TBI President Hamdiya Al-Jaf [Hamida al-Jaf] said the bank has recovered around $400 million by convincing customers in default to restart payments or agree settlements or by taking court action.
“They were loans which were given but with no guarantees or weak guarantees,” Jaf told Reuters in an interview.
“We are continuously working to recover the rest of the defaulted sums. There was misuse of authority, misuse of the money in the bank.”
TBI has developed into one of Iraq’s largest and most profitable financial institutions after it was established after the invasion that toppled Saddam Hussein.