From left: Faisal Al Haimus with senior Commerzbank executives after the signing ceremony. Al Haimus said Iraq is focusing on growing the country’s private sector. Image Credit: Ahmed Kutty/Gulf News

Abu Dhabi: Trade Bank of Iraq (TBI) on Wednesday signed a 100 million-euro (Dh424 million) loan agreement with Commerzbank to support small and medium-sized projects in Iraq and boost the economy, top executives of the two banks said in Abu Dhabi.

“This loan agreement will enable us to provide support for SMEs in Iraq as they have a big role to play in the economic upturn in Iraq by driving the growth,” said Faisal Al Haimus, Chairman & President of Trade Bank of Iraq.

“Thanks to the backing of Euler Hermes, funds will be transferred directly by Commerzbank to suppliers from Germany and other European countries ensuring the success of the suitable projects we identify. The SMEs will get access to the supplies and machinery with excellent repayment terms.”

The agreement was signed at TBI’s representative office in Abu Dhabi Global Market on Wednesday in the presence of senior executives from Commerzbank and Germany’s export credit insurer Euler Hermes.

Trade Bank of Iraq is approved by Euler Hermes as a borrower for medium and long term export credit agency financing with repayment terms of up to five years.

TBI was established in July 2003 with the aim of helping in the reconstruction of Iraq by facilitating international trade and is currently undertaking large-scale infrastructure developments across the country.

Al Haimus told Gulf News in an interview that the government of Iraq is focusing on growing the private sector business and has allocated about $2 billion (Dh7.35 billion) to support small to medium sized enterprises.

“In Iraq, the main driver is public sector which employs about six million people and it’s a burden, not enabling the country to direct its investments into important sectors like education and health and draining out the income of Iraq on salaries, so therefore it is a very serious attempt by the government by allocating this $2 billion to boost the private sector.”

“All the banks are also hoping to push in that direction so that we can transform our economy from public driven to private sector.”

Expansion plans in Saudi Arabia

On the expansion plans of the bank, he said they would be opening a branch in Saudi Arabia in the first quarter of 2019.

“We are interested in countries we trade with like the UAE, Saudi Arabia. In Turkey, we were planning an acquisition but with fluctuations in Turkish Lira, we put this on hold for now and hopefully once things stabilise we will go back.”

Revenue target of $1 billion in 2018

This year, the bank which has 25 branches across Iraq is targeting $1 billion revenue from $755 million in 2017.

“Last year, the bank’s total income was $362 million, this year we will beat that.”

Trade Bank of Iraq opened its representative office at Abu Dhabi Global Market last year.