Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?


Citigroup To Become First U.S. Bank With Offices In Iraq

By  +Follow June 24, 2013 11:37AM
Tickers Mentioned:


In a move that may appear more than a little risky to say the least, the Financial Times reported on Monday morning that Citigroup (C) is set to become the first U.S. bank to open representative offices in the oil-rich and war-torn country of Iraq.

The announcement comes at a time when the bank, headed by new CEO Mike Corbat, is in the process of reconsidering many of its foreign offices for closure. But Citi, like many institutions, has had its eyes on Iraq since the controversial and globally unpopular 2003 Anglo-American invasion, having provided financial services to companies operating in the country via its offices in Dubai, Amman, and London.

Though the Bush administration reassured the world that coalition forces entering the country to personally unsure the removal of Ba’athist dictator Saddam Hussein would be welcomed as liberators, the invasion upset a decades-old sectarian balance that had a roughly 20 percent Sunni minority dominating a far larger majority of Shi’ites, some 60 percent of the populace, as well as another 20 percent of ethnic Kurds located mainly in the north. Iraq’s ethnically diverse society also includes a significant but rapidly dwindling Christian community that is one of the world’s oldest.

Iraq’s civilian infrastructure, as well as its formerly proud and nationalized oil industry, had already been vastly decimated by some ten years of Western-imposed sanctions that have been blamed for destroying what was once on the brink of becoming a first-world country. The absolutely brutal sectarian civil war that was set off by the invasion and is still ongoing has destroyed what little was left of that legacy, and has furthermore caused a situation in which a country previously known for its relative secularism and interfaith harmony, however dictatorially imposed this may have been, has become one defined by an entrenched sectarian animosity and defacto Balkanization.

After numerous unmet promises from the Bush administration that the Iraq’s enormous oil reserves would pay for both the invasion as well as reconstruction, Citigroup estimates that oil exports will provide for a $2 trillion economy by 2050 (the war itself has cost the U.S. some $3 trillion and counting, according to Nobel prize-winning economist Joseph Stiglitz). The bank plans to open offices in the capital Baghdad, as well as in the Northern Kurdish city of Erbil (said to be the world’s longest-standing city), and the Southern port city of Basra.

It is a “toe in the water” strategy on the part of Citi, who plans to expand these offices into full branches sometime within the next year, likely depending on the security situation. But while Citi’s estimates about the future size of the Iraqi economy are probably inarguable, as oil firms and related industrial and construction companies have finally been awarded the rebuilding contracts for which they have been clamoring for years, there are a number of obstacles for the foreseeable future.

Primarily, the ever-expanding civil war next door in Syria has breathed life into Iraq’s Sunni extremist groups that had previously been all but crushed. Quite the opposite of Iraq, Syria is a country whose 60 percent Sunni majority has been brutally dominated for decades by a group of much smaller minorities led by the al-Assad family that has run the place as its own personal fiefdom for decades. Cross-border cooperation between Sunni extremists has become nearly institutionalized over the past two years of hostilities in Syria.

Additionally, there has been a growing and increasingly significant, if completely unreported, push-back against the involvement of foreign oil companies and other interests on the part of the country’s trade unions, as has been described in detail by Greg Muttitt’s excellent recent book on the subject “Fuel on the Fire: Oil and Politics in Occupied Iraq”. Both of these developments taken together are extremely fluid and could make it very difficult indeed for oil companies and others to secure the returns that have been promised for years by various politicians and other vested interests seeking to justify or profit from the 2003 invasion.

This perhaps explains, for now at least, the “toe in the water” strategy on the part of Citi, especially when other banks like HSBC (HBC) are putting their operations in the country under review. Initially, Citi will not be allowed to engage in full-on banking activities, though that is the eventual goal. For the time being, it will provide support services to the bank’s many clients operating in the country.

Shares for Citigroup were down 2.5 percent on Monday in midday trading to $45.73 against the backdrop of a steep sell-off in markets both domestic and global.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

Signup for our daily newsletter and get our best articles emailed right to you!

Results for c
4 Mar 15 18:26:07
UCLA running $C off the court #BeatSC http://t.co/gdVInUqZAH
Iris Gouveia
4 Mar 15 18:23:12
Multi-Tasking Makeup. http://t.co/QTbQiVULaa $c-hash$ http://t.co/6CNQchCS6U
Natasha Ochenduszko
4 Mar 15 18:22:08
The Fashion Doll Chronicles: Integrity Toys 3rd reveal for 2013: Fashion http://t.co/rr8CXz37QL $c-hash$ http://t.co/dMrJ9jCmB2
4 Mar 15 18:22:02
$C: Fed Officials Voiced Doubts First Bank Stress Test Would Succeed: http://t.co/W4JYAqEtpx
Sage Casias
4 Mar 15 18:20:10
. http://t.co/djKjjXbVhp $c-hash$ http://t.co/3ZjJILXJbz
Douglas Patton
4 Mar 15 18:19:12
http://t.co/EbfEMR42nQ http://t.co/Mop27ZwRWA $c-hash$ http://t.co/Pbs9m8JgrU
Kristopher Wehinger
4 Mar 15 18:16:10
#Outdoors http://t.co/PkTmy9rwcE $c-hash$ http://t.co/qACapWp1XO
Esmeralda Yusufzai
4 Mar 15 18:16:07
http://t.co/FZ58Vxr6Pb http://t.co/YkldP6FXrv $c-hash$ http://t.co/QNNlbLgr3x
Matt Wagner
4 Mar 15 18:14:25
RT @uclatheden: The Den SHOWED UP tonight!! Let's get LOUD and ready to BEAT $C!!!
Kellie Anne
4 Mar 15 18:13:49
RT @uclatheden: The Den SHOWED UP tonight!! Let's get LOUD and ready to BEAT $C!!!
4 Mar 15 18:08:54
#GoBruins #desTROY $C!
4 Mar 15 18:08:13
Go Bruins!!! Beat $C. Senior Night!!! #victorybell #emptystadiumLAtraffic #withUncleTony @ UCLA… https://t.co/QpaMAoU1Rv
Nina Casias
4 Mar 15 18:08:11
http://t.co/6i3WaDq1x9 http://t.co/1Vrb9JAy28 $c-hash$ http://t.co/zhFhlWAO59
Karla Jones
4 Mar 15 18:08:05
:) http://t.co/sNFhfs0QYf $c-hash$
Jenice Tom
4 Mar 15 18:06:25
RT @uclatheden: The Den SHOWED UP tonight!! Let's get LOUD and ready to BEAT $C!!!
Veronica Delgado
4 Mar 15 18:06:15
Multi-Tasking Makeup. http://t.co/X2MlCpbcGC $c-hash$ http://t.co/E4LWygAsxI
Josh Luna
4 Mar 15 18:05:47
RT @uclatheden: The Den SHOWED UP tonight!! Let's get LOUD and ready to BEAT $C!!!
The Den
4 Mar 15 18:05:20
The Den SHOWED UP tonight!! Let's get LOUD and ready to BEAT $C!!!
Arthur Chan
4 Mar 15 18:04:14
Fly Fishing http://t.co/VwtRA2FG0u $c-hash$ http://t.co/bZ9ULH2swD
Trey Albrecht
4 Mar 15 17:56:58
. http://t.co/0zl5wfu71h $c-hash$ http://t.co/TtJJCDo3Uj
4 Mar 15 17:56:55
#Citigroup : CFO John Gerspach to Present at the Raymond James Institutional I... http://t.co/ZhbhgSGh4z $C
Julissa Escarda
4 Mar 15 17:56:12
20 Places To Go Camping Before You Die. http://t.co/iprsu9QpTz $c-hash$ http://t.co/LX78yCMMbA
Julie Zeichner
4 Mar 15 17:46:15
. http://t.co/eWNySHnGZo $c-hash$ http://t.co/cdEZBX7SwW
ArXiv math.FA
4 Mar 15 17:45:09
Universal Jamison spaces and Jamison sequences for $C_0$-semigroups. (arXiv:1503.01343v1 [math.FA]) http://t.co/LJMn1tet6Q
Albert White
4 Mar 15 17:43:21
http://t.co/CInL1jEEo2 http://t.co/vGQOvpAHzt $c-hash$ http://t.co/0tIoJSPXn8
Douglas Patton
4 Mar 15 17:40:17
http://t.co/BMVz5S9gh8 http://t.co/OEcxK86O9l $c-hash$ http://t.co/4aKs62j5M1
Jayda Jones
4 Mar 15 17:38:05
. http://t.co/THFbAMI1X4 $c-hash$ http://t.co/flDpepKN0s
Stock Signaling
4 Mar 15 17:31:09
Movers and Shakers: Recently Upgraded: $NXPI $MDR $PANW $LL $ROVI $JCP $NFLX $TAP $C $MO $ALSN $AXP $DVN $GLNG $BBY http://t.co/DEd0xkdNq4
Ramon Torres
4 Mar 15 17:17:07
:) http://t.co/kdUZuExic3 $c-hash$ http://t.co/lvC7vNWth0
Nancy Schueller
4 Mar 15 17:12:12
#Photography http://t.co/Goh7rqSV44 $c-hash$ http://t.co/fcgjUGWpF5
Keegan Wilson
4 Mar 15 17:12:08
#Products http://t.co/sUYd1qk852 $c-hash$ http://t.co/eXmNwMd9As
Darren Jackson
4 Mar 15 17:10:05
. http://t.co/yz1Wrvzqn0 $c-hash$ http://t.co/M04LSyUTR6
Bilo Selhi
4 Mar 15 17:07:40
If you don't consistently find trades like $VUZI +35%, join http://t.co/uAcamNRUPt http://t.co/sqfVaBGaC9 $IFON $MDBX $NVGN $AVEO $C
Dennis Wilkinson
4 Mar 15 16:57:03
Senior Pics http://t.co/XoRsxwSRrw $c-hash$ http://t.co/vxYyvK6jzW
Carolyn B Miciano
4 Mar 15 16:54:49
Get all the details of US Indexes http://t.co/nE0PeukpOK $MA $V $C
Sleek Money
4 Mar 15 16:50:20
Citigroup Sells Off Subprime Consumer Finance Unit $C http://t.co/jF6XCh1ftW
Dulce Wong
4 Mar 15 16:41:22
Photography Tips http://t.co/zcEEzi3SwX $c-hash$ http://t.co/d2oSonHQZ8
Breaking News Now
4 Mar 15 16:37:02
$C $LEAF: Citi's Holdings Strategy Wins a Hand: http://t.co/7253i7NKxn
4 Mar 15 16:35:08
@Stephanie_Link $BAC $C expecting to pass CCAR this month, buy back, & dividend increase, your thoughts?? #bullish
4 Mar 15 16:30:03
Top Stock Picks: $C $ANF $NXPI $AZO $LEAF $PANW $AMBA $LL $XON $OREX http://t.co/Vv2VEn80mr #nyse #daytrader #investing #nasdaq #daytrading
Corbin Sarmiento
4 Mar 15 16:16:03
everywhere art: Photography Trend: Double Exposure Portraits. http://t.co/uzprDsktD4 $c-hash$ http://t.co/LmiNSVk8Zq
Breaking News Now
4 Mar 15 16:16:03
$C $JPM $GS: 5 ways to trade financials as stress results loom: http://t.co/Wd2qSrdaoK
Bennett Westerman
4 Mar 15 16:14:05
http://t.co/uY23DJQ2uB http://t.co/h5ayn9uy9N $c-hash$ http://t.co/nXxHTR1XFy
4 Mar 15 16:10:59
RT @CeciRod53: http://t.co/1jVrRigKE1 Recuerden,Walid Mackled,tiene fotos videos grabaciones,c/el hermano d/@TareckPSUV c/recibio cheque en…
Sandra Jundt
4 Mar 15 16:10:11
http://t.co/czK6iw5TR5 http://t.co/VzsoGv4Oxh $c-hash$ http://t.co/zbd2Byn5I3
Stella Gibbs
4 Mar 15 16:08:00
New app will allow diabetics to manage condition on their iPhone. http://t.co/tdofSQ1vSh $c-hash$ http://t.co/jJwVDhQF2Q
4 Mar 15 16:07:02
$C $JPM $GS $BAC: 5 ways to trade financials as stress results loom: http://t.co/dJ4TKBFPF0
Ramon Biondi
4 Mar 15 16:06:01
3i Fun. http://t.co/HWcZK4IqBT $c-hash$ http://t.co/r18r74i6xf
4 Mar 15 16:02:01
$C $JPM $GS $BAC: 5 ways to trade financials as stress results loom: http://t.co/VeOHYy1swo
Breaking News
4 Mar 15 16:01:03
$C $MA: Citi, MasterCard reach deal: http://t.co/ErrsFJgNC7
By  +Follow June 24, 2013 11:37AM



blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.