North Bank "in Good Position for Growth"

Also, the report noted that the International Energy Administration in its "World Energy Outlook" said that Iraq is expected to contribute 45 percent "of the global incremental oil supply over this decade. Based on this, the IEA central scenario forecast predicts Iraq GDP to grow 151 percent between 2011 to 2020.

The Sansar report added that rising credit penetration is likely to further fuel banking sector growth. "Buoyed by strong economic growth and rising credit penetration, the five largest private Iraqi banks grew aggregate net income by 207 percent between 2010-2012.

This same report, while noting that North Bank has delivered strong profit and earnings-per-share growth over the last several years, went on to say: "We are concerned, however, about the future profitability of the bank given stricter Central Bank of Iraq regulations on foreign-exchange activities. We believe the bank needs to re-focus its attention to the following key challenges in order to position itself for long-term growth:"

• Focus on quality deposits – Sansar asserts that North Bank needs to focus on creating quality deposits and not quantity of deposits. With a 7 percent interest rate paid on saving deposits, the bank has the highest cost of funding amongst the five largest private Iraqi banks, the report said.Nozad Al Jaff

• Focus on quality lending – similar to the story of deposits, the Sansar report "believe the bank needs to focus on providing quality loans backed by quality collateral; we do not view growth via over-draft facilities as a way to sustainable business development."

• Improve transparency – Sansar found little disclosure in North Bank financial statements around collateral value against overdraft facilities. Also, Sansar said it could not find a detailed breakdown of its loan provisioning schedule as is provided by other banks. "We believe investors will need more information to make a fully informed decision on the bank."

Al Jaff, spoke of the critique of the Sansar report, saying the following: ''Well it was mentioned to us and we looked at it seriously. We looked into those criticisms. However, we are now at 2013 and nothing has changed or happened in Iraq so I think that those assumptions were incorrect.

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