The financial services sector looks set for rapid expansion in the Kurdistan Region of Iraq as a brand new stock exchange gets up and running and HSBC considers putting its own-brand on high street branches in the Region.
International banking and financial services will play a significant role in the economic development of the Region, predicted the Kurdistan Prime Minister’s leading adviser on the economy, at a trade and investment conference in the City of London.
Dr Ezat Issa, Kurdistan Regional Government Advisor on the Economy, called on international providers of banking and financial services to look to the Region as a stepping stone for major growth opportunities across the whole of Iraq.
Speaking at the close of the first day of the conference (June 15), Dr Issa said: “There really is no better time for financial services to explore the opportunities offered in the Kurdistan Region. With a liberal foreign investment law, a Banking Law that introduced a modern, efficient banking regime and a secure and stable political situation, Kurdistan is the ideal place for financial services to establish themselves before developing into the rest of Iraq.
“Currently the financial services sector accounts for 2% of all business occurring in the region, but we envisage this growing significantly - driven largely by the needs of private sector businesses.”
Dr Issa invited foreign companies to list on the soon-to-be-launched Erbil Stock Exchange (ESX). The ESX was licensed in February this year, is expected to appoint a board in July and will see its first day of trading later this year.
The independent ESX is based on the model used by the Dubai and Abu Dhabi exchanges, and is intended to offer greater flexibility for foreign investors, facilitate the Region’s credit flows and stimulate links to the international business community.
International banks have already identified Kurdistan as a strategic location from which to develop a network of branches across Iraq. In 2008 Byblos Bank of Lebanon opened a full service branch in Erbil.
HSBC recently announced its intention to expand its majority-owned Dar-es-Salaam Bank network across the country, and upgraded its branch in Erbil. Speaking at the conference Michael Hodges, HSBC’s Business Development Manager for the MENA Region, suggested HSBC would consider putting its own brand on the face of its high street branches in the Region in the near future.
PriceWaterhouseCoopers currently have a 30-strong team based in Erbil, and provide a range services to the Kurdistan Region and across Iraq, including acting as auditors to the Trade Bank of Iraq, which is co-owned by JP Morgan and other international banks.
The two day international investment conference is being hosted in the City of London by the Kurdistan Prime Minister Barham Salih, and is strongly supported by the British Government. Speaking at the conference last night (June 15), Alistair Burt – UK Foreign Office Minister for the Middle East – welcomed the “great opportunity for British businesses to build strong commercial links between the UK and the Kurdistan Region”.
Also speaking at the conference (June 15), UK Trade and Investment Minister Baroness Wilcox said: "The Iraqi Kurdistan region is a gateway for British companies looking to establish a foothold in Iraq. The Iraqi Kurdistan region offers huge potential across a range of sectors for British companies that want to secure a share of this emerging market."