Iraq’s central bank has reportedly placed private bank Warka Bank under guardianship to supervise it through insolvency.
Warka Bank had been in talks with Standard Chartered Plc to sell a stake last year, but they were not successful.
According to the report from Reuters, Mudher Kasim, deputy governor of the central Bank of Iraq, said:
“We gave Warka a chance to have Standard Chartered to be a partner but that did not happen, so there was nothing we could do as a financial authority … but to intervene as a guardian.
“When the bank loses its capital, fails in its financial operation and faces an unsolved problem, the central bank according to its law, intervenes as a guardian and appoints a new temporary administration to run this bank.“
He said the central bank would appoint a new administration to run Warka Bank, which would be given a month to appoint an auditor to determine how to restructure it and whether it needs to sell assets to raise capital.
Abdul-Aziz Hassoun, executive director of the Iraqi Private Banks League, said in August Warka needed less than 100 billion Iraqi dinars ($90 million) to enhance its liquidity.