Standard Chartered is counting on the assistance of the British government to help it to open branches in Iraq by the end of the year.
Standard Chartered plans to expand in Iraq with UK government help
The move is part of its bid to steal a march on banks from the United States as the coalition allies who ousted Saddam Hussein attempt to carve up Iraq's market for financial services.
The British bank is preparing to launch three branches in the country within the next year and a half as it seeks to tap into the financing needs of oil-rich Iraq's reconstruction from a decade of conflict.
US banks including Citibank and JPMorgan Chase both recently announced investments in the country as oil production recovers and investment banking deals return. However, HSBC Middle East recently announced plans to fully exit the country with a sale of a disposal in its local subsidiary.
Attacks in Iraq killed at least six people in Baghdad yesterday, officials said.
It was the latest surge of violence in the country that was underscored by a series of car bombs near the capital's green zone that left at least 33 people dead on Thursday.
That came just two days after a bombing briefly stopped crude oil flows on a pipeline to Turkey. May's death toll was the highest since 2008.
Standard Chartered is nevertheless planning for an on-the-ground presence as part of a strategic push into the country.
"We are planning to open three branches in Iraq, Baghdad, Erbil during the fourth quarter of 2013 and then Basra during 2014, subject to regulatory approvals," a spokesman for Standard Chartered said.
"The bank has already submitted its branch licence application to the regulators in Iraq. Our main aim is to meet the increasing banking needs of our global network clients in Iraq, notably in the power, oil, telecoms and infrastructure sectors."
Standard Chartered has operated a representative office in Erbil since 2006 but is looking to expand its presence and hire "significant numbers" of Iraqis. "We're trying to get locals in from day one," said one person familiar with the bank's plans.
The British embassy is taking an active role in assisting Standard Chartered to enter the Iraqi market through facilitating negotiations with the Iraqi and Kurdish regional governments, added the person, speaking on condition of anonymity.
Britain's trade and investment's local representative declined to comment on the exact assistance being provided. The agency is a British government department that works with businesses based in the United Kingdom to facilitate expansion overseas.
In the meantime, banks from the US are attempting to catch up.
Citibank established a representative office in Baghdad this year, while JPMorgan has deepened ties with Trade Bank of Iraq as the US financial sector seeks to take advantage of soaring oil production.
The US$1.3 billion initial public offering in February of Asiacell, the Iraqi unit of Ooredoo (formerly Qtel), was the Middle East's biggest since 2008 and has convinced some investment bankers that further deals are possible.
But other lenders are pulling back. HSBC Middle East is currently attempting to exit Iraq through a disposal of Dar Es Salaam Investment Bank, which is likely to prevent it from taking part in Iraq's recovery through means other than an offshore banking presence.
"As announced via the stock exchange notification on June 25, 2013, HSBC has decided, following a strategic review, to explore options for the disposal of its 70.1 per cent shareholding in DES," the bank said.