Iraq places Warka Bank under guardianship
Baghdad, March 4, 2012
Iraq's central bank placed private bank Warka Bank under guardianship to supervise it through insolvency, a senior official in the central bank said on Sunday.
Warka Bank had been in talks with Standard Chartered to sell a stake last year, but the talks reached a dead end, said Mudher Kasim, deputy governor of the central Bank of Iraq.
'We gave Warka a chance to have Standard Chartered to be a partner but that did not happen, so there was nothing we could do as a financial authority ... but to intervene as a guardian,' Kasim said.
He said the central bank would appoint a new administration to run Warka Bank, which would be given a month to appoint an auditor to determine how to restructure it and whether it needs to sell assets to raise capital.
'When the bank loses its capital, fails in its financial operation and faces an unsolved problem, the central bank according to its law, intervenes as a guardian and appoints a new temporary administration to run this bank.'
Abdul-Aziz Hassoun, executive director of the Iraqi Private Banks League, said in August Warka needed less than 100 billion Iraqi dinars ($90 million) to enhance its liquidity. Warka Bank executives could not be reached for comment.
Iraq has seven state-owned banks, 23 private banks and eight Islamic private banks, according to the central bank website.
Its banking sector is dominated by two state-owned banks, Rafidain and Rashid, which are undergoing restructuring to eliminate debt racked up after years of war and sanctions.
Much of Iraq's private banking activity is limited to deposit services and a small amount of personal lending. Warka Bank for Investment and Finance, which was established in 1999, has 130 branches and 350 ATM machines around Iraq. - Reuters