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HSBC is
close to buying a majority stake in Iraqi bank Dar
Es Salaam Investment bank, according to one of the
global bank's senior executives.
HSBC is in talks to buy a 70% stake in the Iraqi
lender, which has 14 branches across Iraq and
employs 450 staff.
HSBC was one of three foreign banks given permission
last year to start trading in Iraq.
But high levels of violence have so far hindered the
development of the country's banking system.
Basic services
HSBC hopes to buy the company from its main
shareholder, the Khudairy family.
David Hodgkinson, chief executive of HSBC's Middle
East operation, said the bank was "very close" to
concluding an agreement.
He said HSBC hoped to develop the bank's services by
investing in computerised payment systems and cash
machines.
"I think because the banking system in Iraq is still
in its fairly early stages of development, it will
be a question of putting in place fundamental
services," he told Reuters.
Foreign banks were banned from Iraq under Saddam
Hussein although a number of private banks were
licensed to operate.
After Saddam Hussein was overthrown, HSBC, Standard
Chartered and National Bank of Kuwait were licensed
to operate in Iraq.
Any deal would have to be approved by the Central
Bank of Iraq as well as the board of Dar Es Salaam.
With operations in Bahrain, Jordan, Kuwait, Lebanon,
Oman and Qatar and the Palestine Authority, HSBC
claims to be the largest international banking group
operating in the Middle East.
www.bbc.co.uk
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