How would you describe BBAC’s goals in the Kurdistan Region?
About ten years ago, our bank felt the need to begin operating in the Kurdistan Region following the promulgation of the 2006 Investment Law, which granted investors incentives, privileges , and administrative and fiscal facilities. We were also encouraged to enter the market by what we perceived was a gap in banking experience in the Region.

We entered the market with the intention to help finance investments in all sectors, but specifically targeted housing, services and infrastructure. Since initiating our operations in Kurdistan, our bank has focused on offering all of the banking services offered in our branches in Lebanon, in line with local laws and regulations. We are able to deliver products and services quickly and at high quality. Thus, our bank has been very well received by businesses and individuals in Kurdistan.

What opportunities do you see, and how is BBAC capitalizing on them?
Kurdistan is witnessing an unprecedented economic boom, in line with our expectations we set upon coming here. This economic growth is largely due to the policies adopted by the KRG to encourage foreign and domestic investment, as well as the Region’s remarkable security situation. These factors have produced important investment opportunities.

Sectors such as construction, services, and tourism have truly taken off as a result of these factors, and the construction of essential infrastructure in the Region is still in progress. Industry has also been booming in recent years. Kurdistan’s recent economic growth has resulted in large funding needs by the companies involved. BBAC has considerably contributed to many of the Region’s major projects, particularly by granting documentary credits for their financing.

Kurdistan’s recent economic growth has resulted in large funding needs by the companies involved. BBAC has considerably contributed to many of the Region’s major projects.

How would you describe the landscape of private banking? Is there significant room for further growth?
The last three years witnessed an outstanding development of the local banking sector. Indeed, more foreign banks have entered Kurdistan as well, particularly from Lebanon. Five Lebanese banks are currently operating in the Region, and five others are awaiting final licenses from the Central Bank of Iraq to enter the market. It is noteworthy that all of these banks are among the top banks in Lebanon, and all are members of Alpha Group, with deposits of at least $2 billion apiece. Despite the increased competition, we believe that opportunities are still numerous and promising. There are many investment projects still under preparation, the Region’s infrastructure is in need of further development, and the international standard ratio of bank branch per capital has not been reached yet. The international standard is 10,000 inhabitants for each bank branch, while in Iraq the number is 30,000 people per branch. Moreover, the ratio of cash credits granted by Iraqi banks to the GDP of Iraq does not exceed 8.5%, and the relative contribution of the banking sector to Iraq’s GDP is still very modest. All of these factors indicate that potential growth in this sector is still significant.

What demand have you seen from corporate clients?
Since we started our operations, most of our credits went to large institutions and projects. This is due to the lack of basic legal requirements and assurances for retail credits, and the absence of institutions to support the banking sector, such as insurance companies. The high number of major investment projects, which almost outnumber small and medium size projects, encouraged us even further to fund such projects. Currently, we are considering entering into an even larger funding operation in partnership with a number of other Lebanese banks.