Citigroup Inc (C) Plans Office in Baghdad

At a cafe inside Baghdad’s heavily fortified Green Zone, Citigroup Inc (NYSE:C)’s Malik and Flannery described the new office as the start of a broader relationship with Iraq that could lead to bank branches down the road. The office itself will start out small and will be located outside the confines of the Green Zone, a sprawling complex of government buildings and embassies sealed off from the rest of the city by blast walls and heavily armed soldiers backed by tanks.

“There’ll be next steps,” Flannery said. “It’s important to collect information, to learn better what the market is all about, to learn the good parts, the bad parts, everything. … And that will enable us to take that next step to full-scale banking in a better informed way.”

The bank says the Baghdad outpost may be followed by additional representative offices in the southern oil hub of Basra and the Kurdish regional capital Irbil in the north of the country.

Citigroup Inc (NYSE:C) already counts as clients many of the large international oil companies that have been brought in to develop Iraq’s vast oil reserves, he said.

The bank is also advising Kuwaiti telecommunications provider Zain as it gets ready to list shares of its Iraqi operations on the Iraq Stock Exchange. Another Iraqi telecom, Asiacell, raised nearly $1.3 billion when it floated shares on the small stock exchange in February. It was one of the Middle East’s biggest stock offerings in years.

Britain’s Standard Chartered, meanwhile, is working on plans to open bank branches in Baghdad, Basra and Irbil. Its reasons are similar to Citigroup Inc (NYSE:C)’s.

“We need to be on the ground to support our global network clients in industries such as power, oil, telecoms and construction,” spokesman Piers Townsend said.

Saleh Mahoud Salman, the director of administration at the Central Bank of Iraq, was unable to say when the companies’ operating licenses would be issued. He welcomed the banks’ interest in Iraq, saying they could help “develop the economy and push the banking sector forward.”

Even as Citigroup Inc (NYSE:C) and Standard Chartered push into Iraq under their own brands, British banking giant HSBC Holdings plc (NYSE:HBC) is considering an exit of its 70 percent stake in Iraq’s Dar es Salaam Investment Bank as part of a wider review of its global operations.

The article Citigroup Plans Office in Baghdad originally appeared on Fool.com.

The Motley Fool owns shares of Citigroup Inc (NYSE:C).

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