Iraqi Dinar News - Byblos Bank to open Irbil branch in early May

2007: Byblos Bank to open Irbil branch in early May

Byblos Bank to open Irbil branch in early May

March 13, 2007

Byblos Bank says it will open a branch in the northern Iraqi city of Irbil in early May, becoming the first Lebanese financial institution to operate in the country. Byblos officials refused to say how much they invested in the Irbil offices, which will be staffed by 15-20 Lebanese and Iraqi nationals. About nine months ago the Iraqi Central Bank granted Byblos a banking license, which does not come with minimum reserve requirements for the Irbil branch.

"Iraq is not a new experience for Byblos Bank," said spokeswoman Ingrid Sfeir. "During the 1960s and 1970s, Byblos had dealings with major Iraqi traders and industrialists and banks. Today, Irbil and Kurdistan are a safe area to operate in. We are also following some of our Lebanese, Arab and European clients who have established a presence in Irbil. We have a plan to increase our branch network in Kurdistan and subsequently in all of Iraq."

Local bankers generally applauded the move, seeing Iraq as a potentially lucrative market. Despite daily media reports of violence, bankers said Irbil was secure.

"Irbil is more peaceful than Beirut," said Saad Andary, deputy general manager of Bank of Beirut and the Arab Countries (BBAC). "It is the most peaceful region in Iraq right now. There is a lot of trade and a lot of investment conducted in Irbil and its surroundings. This is a good move on the part of Byblos."

Byblos Bank representatives would not discuss their business plan for Iraq, but several openings exist.

"The need for construction alone is billions," said Joe Sarrouh, executive adviser to the chairman of Fransabank. "Definitely there is an opportunity there - the only handicap is the security situation. Iraq in general is a very promising market ... We are interested."

With the flood of Iraqis fleeing to Jordan, many entrepreneurs have turned to Jordanian banks, with a smaller number using Syrian and Lebanese institutions. Lebanese banks interact with Iraqis now mostly through letters of credit for Iraqi traders, but by setting up shop in Iraq, Byblos Bank might be able to absorb some of the business now going to banks outside Iraq, Andary said.

The move to Iraq is in keeping with the current regional expansion trend among Lebanese banks. Byblos Bank opened two new branches in Sudan last year and will christen a new headquarters there next year, Sfeir said. Byblos Bank also has plans to launch operations in Algeria, perhaps within a year.

Lebanon's largest bank, Banque Audi, cut the ribbon on its Saudi Arabia branch on February 21, and bankers here told The Daily Star that Banque Audi purchased premises in Iraq and trained staff, but put its plans on hold. Banque Audi officials refused to comment for this article.

Fransabank sent a delegation to scout opportunities in Irbil two months ago, but decided to consolidate its recent expansion into Sudan and Algeria before opening any more new outposts, Sarrouh said.

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