Citigroup Inc (NYSE:C) is set to become the first American bank to open an office in Baghdad, with Iraq’s central bank giving its preliminary consent.
The third-largest lender in the U.S., Citigroup Inc (NYSE:C) got approval from the Central Bank of Iraq. Citigroup Inc (NYSE:C) also plans to have branches at Erbil and Basra.
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Baghdad’s entry marks the first new country operation for Citigroup Inc (NYSE:C) in six years. The new initiative comes amidst the bank reviewing dozens of operations in about 100 countries for possible closure.
The representative office will help support its corporate customers in Iraq and would act as a liaison for corporates looking to do business in Iraq.
The country has struggled to attract interest from Western companies outside of the oil sector in the 10 years since U.S.-led forces toppled dictator Saddam Hussein. Security and political instability remain major concerns, and corruption within the top-heavy statist economy is deeply entrenched.
Other Banks Following Suit
Several foreign banks are seeing opportunities with Iraq’s economy opening up on the bank of an oil boom. Last year, the country became the second-largest oil producer in OPEC. Currently Iraq churns out over 3 million barrels of crude oil a day.
The World Bank is optimistic of Iraq’s economic growth as it pegged the country’s growth at a satisfactory 9 percent for 2013. This fares quite well amid global economy as a whole and is expected to grow just over 2 percent.
The British bank, Standard Chartered, is also pursuing its intention to open branches in three cities of Iraq at Baghdad, the southern oil hub of Basra and the Kurdish regional capital Irbil.
However, as part of its review of global operations, Britain’s HSBC Holdings plc (LON:HSBA) is considering an e