Citigroup and Bank of Baghdad have announced a strategic partnership which offers corporate clients, with major business presence in Iraq, a seamless cash management solution and other relevant banking services.

The client offer encompasses account services, domestic and international payments and collections, liquidity management and electronic banking solutions, backed by a comprehensive customer service and streamlined documentation processes.

This key partnership leverages Citi’s state-of-the-art global cash management platform, as well as Bank of Baghdad’s franchise and extensive branch network. The partnership also gives Bank of Baghdad, a subsidiary of Kuwait’s Burgan Bank, access to Citi’s global network across more than 107 countries for cash management solutions and other banking services.

Steve Donovan, Head of Global Transaction Services, Middle East & Pakistan at Citi, said:

“We are delighted to announce this partnership with Bank of Baghdad which is in line with our commitment to Iraq as well as our strategy to bring the right capabilities to our clients through our own global network or through partnerships with prime local banks. This alliance certainly creates a win-win situation for our mutual client base.“

Dr. Younes Brouche, Executive Vice Chairman at Bank of Baghdad said:

“Bank of Baghdad has had a long standing and successful relationship with Citi. It brings together our bank’s extensive network in Iraq, our product suite and service excellence with the global reach of Citi. We look forward to working with Citi to provide valued clients with bespoke solutions to help them with their operations in Iraq.“

Eduardo Eguren, Chief Executive Officer at Burgan Bank Group, said:

“We are pleased to announce this winning partnership. Bank of Baghdad is a fast growing member of Burgan Bank Group and has successfully placed itself as one of the major players in Iraq. This partnership will indeed add value to both Bank of Baghdad’s and Citi’s clients as well as to Burgan Bank Group clients.“

Citi has been in the Arab World for nearly 50 years and views the region as critical to its global franchise. It currently offers full scale corporate banking services across ten Arab countries including Egypt, UAE, Lebanon, Jordan, Tunisia, Morocco, Algeria, Bahrain, Qatar and Kuwait as well as Pakistan. Its consumer banking services cover UAE, Egypt, Bahrain and Pakistan, while it maintains close relationships with high net worth clients in the region through the Citi Private Bank.

(Source: Zawya)

It’s always been a bit of a mystery why anyone should care about bonus share issues.  Since a company’s retained earnings are already owned by the shareholders, you would think that converting these earnings into shares shouldn’t have any effect on an investor’s returns.  Following a bonus, the share price should logically fall by an amount just sufficient to leave the market value of your position unchanged.

Surprisingly, however, the ex-bonus price often falls by less than you’d expect, leaving the shareholder with a profit.  In some cases, these gains may even exceed the amount the company would have been able to pay out as a dividend, making the new shares a better deal than a cash payment.

With a number of ISX-listed banks now likely to issue bonus shares to meet the central bank’s new minimum capital requirement, you might therefore expect to make some easy money holding Iraqi bank shares.  So far, however, the first two banks to resume trading following bonus issues have been disappointments.  (See my June 2 and June 29 posts for more on the central bank’s new policy and bank share suspensions.) 

This month, Middle East Investment Bank (BIME) and Bank of Baghdad (BBOB) closed their first ex-bonus trading days down 2.9% (on 7/15) and 4.3% (on 7/21), respectively.  These were significant underperformances whether measured against the ISX index, the Rabee Securities RSISX index (available online at http://rabeesecurities.com), or the returns on the four most liquid bank stocks to trade continuously during the BBOB and BIME suspension periods.  (Please click on the above table for more details.)