BAGHDAD, July 29 Abu Dhabi Islamic Bank , the second-largest Islamic lender in the United Arab Emirates (UAE), began operating its first branch in Baghdad this month, aiming to play a role in the development of private banking in Iraq, the bank said.
The OPEC country is slowly getting back on its feet nine years after the U.S.-led invasion that toppled former Iraqi leader Saddam Hussein and it needs foreign investment in virtually every sector to rebuild its dilapidated infrastructure.
Iraq is expected to be the world's biggest source of new oil supplies over the next few years after signing contracts with international oil companies, and draw more investment in other areas like infrastructure.
"The country is on the comeback, business conditions have improved considerably and it's the right time to get in," Tirad Al Mahmoud, CEO of ADIB, said in a statement.
Iraq is safer now than the years of the sectarian violence in 2006-07 but attacks and bombings are still happening daily. Just last week, more than 100 people were killed in coordinated attacks across the country.
The Central Bank of Iraq confirmed granting a license for the UAE bank to open a branch in the country.
According to the central bank website, Iraq has seven state-owned banks, 23 private banks, and 11 Islamic private banks, including Abu Dhabi Islamic Bank.
Most banking activities are conducted by two state-owned banks, Rafidain and Rashid. Much of the private banking activity is limited to deposit services and a small amount is personal lending.
"Our challenges are clear. We aim to increase the private sector banks' share of the Iraqi market from the current level of less than 20 percent and to develop the Islamic banking industry there," Mahmoud said. (Reporting by Aseel Kami; Editing by Diane Craft)