November 29, 2007

Director General of Al-Rafidain Bank said it has a plan to build ten branches in Iraq next year. He also revealed a memorandum of understanding between the bank, the Ministry of Finance and the Central Bank, sponsored by the International Monetary Fund, for rehabilitation of the bank and its organizational structure. The bank is planning as well to reopen loans to employees early next year and reconsider their high interest rates.

Abdul Hussein Abdul Azeem Al Yasiri, Al Rafidain Bank board chairman and general director, said during a ceremony to lay the foundation stone for the construction of the Rumaythah branch, "The bank operates according to a plan and global standards in opening branches, taking into account the region's requirements for a bank and the economic feasibility of operating in the region... .” He pointed out that the 2008 bank plan includes opening eight to ten branches in various regions of Iraq in addition to one in Damascus, especially after the closure of our branches in Aleppo and Damascus, Syria, in light of Iraq's oil nationalization decision. The Bank now has 150 branches in Iraq and eight branches abroad.

Al-Yasiri explained that the low standards of our banks are due to difficult conditions experienced by Iraq during the former regime, including the war on Iran, the invasion of Kuwait and the comprehensive siege which led to the freezing of Iraqi assets. Banks fell behind global banks in all areas, including technical and computer, adversely affecting performance. He pointed out that despite all the delays in development, we find that Al-Rafidain Bank matched global standards, with very high deposit levels of 15 trillion Iraqi dinars. Profit margins match any bank in the world, by last September reaching 781 billion Iraqi dinars on capitalization of just 25 billion Iraqi dinars. This success came despite old practices and computers.

Al-Yasiri said the memorandum of understanding with the Minister of Finance and the Governor of the Central Bank under the supervision of the International Monetary Fund for the rehabilitation of Al-Rafidain Bank will re-organize its structure, supply it with computers and a sophisticated smart card system, plus send missions abroad to establish links with global banks, in an effort to match the level of international banks.

About the smart card project, Al-Yasiri said that a collaborative company was established last September by Al-Rafidain Bank, Al-Rasheed Bank and the Global Smart Card Company, aiming to complete this project within at most three months. He explained that this card will solve a lot of bank branch problems, particularly for the two and a half million retirees who receive their pensions through Al-Rafidain Bank.

As for dealing exclusively with certified checks, in the 2008 plan the emergence of smart cards and integrated systems will replace the certified-check system; dealing with the bank will be by phone, and there will be sophisticated customer service facilities. As for the high interest rates in Iraqi banks, Al-Yasiri said that they do not approve the current high interest rates set by the Central Bank as part of its monetary policy, but recommend the reduction of interest rates to contribute to reconstruction and the development of the Iraqi economy.

Al-Yasiri tackled the subject of credit and loans which consist of three types of consumer credit that contribute indirectly to the economy, but are not investment since they are not for production of goods and merchandise, but for purchases. He said, "We have stopped granting loans until the end of the current year, despite our knowledge of employees' need for these advances which are a kind of support; however, we will re-start working with these advances early next year, 2008."

For his part, Adnan Jabbar al-Musawi, manager of Al-Rafidain Bank branch in Rumaythah (240 km south of Baghdad) said that the bank has laid the foundation stone for this branch in the commercial center of the city of Rumaythah on 822 square meters of land, at a total cost of over one billion ID. It is hoped to finish the project within ten months, according to construction contracts. The branch will be built according to architectural standards meeting modern international specifications for functional modern banks abroad. He explained that the building will consist of two floors: the ground floor includes the management room, the stronghold room and a customers' hall, and an upper floor with a large hall for clients dealing with various bank divisions.