News Agencies Feed
Lebanese banks to exit Iraq over increasing compliance demands

Sep 09

Lebanese banks to exit Iraq over increasing compliance demands

The banks that have been earmarked for imminent closure are Fransabank, IBL, Credit Libanais and BLF, according to sources.

BEIRUT: A number of Lebanese banks operating in Iraq have decided to shut down their operations in the country due to increasing compliance demands and growing risks factors, a leading banker said Monday.

The banks that have been earmarked for imminent closure are Fransabank, IBL, Credit Libanais and BLF, according to sources.

Nadim Kassar, general manager of Fransabank, told The Daily Star over the phone that Iraq has lot of compliance issues and this has required a lot of efforts from the banks to cope with these conditions.

“We decided to close our branches in Baghdad and Irbil and we have notified the Iraqi authorities about our decision. Our size of operations in Iraq is not that significant and for this reason we opted to leave this country,” Kassar said.

He added that Lebanese banks have enough problems in Lebanon and don’t want to handle more headaches in Iraq.

Several Lebanese banks had expanded to the oil producing country over 10 years ago, hoping to capture a size of the business in Iraq.

“We made a study to determine if our presence in Iraq will generate good return. But we discovered that the demands placed by the Iraqi Central Bank concerning compliance is not worth the effort,” Kassar said.

“There were lot of risks and efforts needed in Iraq and we saw there is no need to take extra risks at the moment,” he added.

Kassar stressed that closing operations in Iraq was not part of any restructuring plan by Fransabank, noting that the bank is doing quite well in other countries such as Algeria and France.

Other bankers said that many Lebanese lenders have went back to the drawing board after the Central Bank asked9 them to increase the capitals and repatriate part of the money they transferred abroad in the last few years.

They added that presently the main emphasis is to go ahead with the new challenges facing the Lebanese banking sector amid growing calls to restructure the Central Bank and the private banks.

zawya