Warka bank saga: Political and Business tensions

[rightsonword]

'We have customer deposits of about $270 million that we have to pay as opposed to a total of $500 million in loans that were owed by clients, and you are not even talking about the assets and real estate and investments,' said Bunia.

'The bank is financially sound but they don't want the bank to stand on its feet again. No one wants to deal with a bank that is under custodianship.'

The central bank's Kasim said the external auditor, an Iraqi firm, was expected to submit a report within two weeks that might consider a restructuring through the creation of a 'bridge bank' which would take on Warka's good assets.

'I am neutral but from looking at its balance sheet, I personally think this bank is capable of being resuscitated, and I hope it is in the interests of the Iraqi banking sector,' Kasim said. 'We want this bank to resume its activities and distance itself from high-risk activities.'

http://www.xe.com/news/2012/03/28/2573045.htm?c=1&t=

They claim there is a government conspiracy to make them go under. Hope this ends well for anyone with money in Warka.

[DinarBot]

US Military DOD has a banking Division. It is/was assisting CBI in monitioring / building the banking indusrty in Iraq. Money laundering etc. may have been a key element in the demise of Warka. Or not. Most if not all previous articles related to Warka's poor book keeping. Hiding things. Or just bad at Mathematics. Either way we have Big Brother coming in to set it straight. Good news.

[Goldiegirl]

I wonder how many US Military or Gov't officials have an account at Warka besides us wee folk.

I am not worried about my money or this bank. Seeing this in the news is good to see.

Thanks for posting.

Goldiegirl

[SocalDinar]

Warka Bank Saga Shows Iraq Political, Business Tensions

Warka Bank Saga Shows Iraq Political, Business Tensions

Posted on 29 March 2012. Tags: Standard Chartered, Warka Bank

Iraqi banker Saad al-Bunia says Warka Bank for Investment and Finance, which was placed in insolvency proceedings by authorities this month, is a victim of its own success, with its growth threatening the near-monopoly of state banks.

“They don’t want a strong bank to operate and compete with state banks,” said British-educated Bunia, a member of one of Iraq’s old and wealthy merchant families, who accuses authorities of waging a campaign to undermine the bank, according to a report from Reuters.

The rise and fall of the country’s largest privately owned bank, and the struggle to ensure it rises again, underline the opportunities and obstacles in Iraq’s chaotic business environment.

The report says the saga also shows how political divisions plague business in Iraq. The controversy over Warka has polarised government officials and members of parliament, highlighting a rift between the Shi’ite-led government and a Sunni Muslim community which lost political dominance because of the U.S. invasion in 2003, but which still retains considerable economic power.

The central bank took custody of Warka, in which the Bunia family owns a 56 percent stake, early this month; an external auditor will study how to restructure it and whether it needs to sell assets to raise capital. Warka’s board of directors filed suit last week to try to reverse the central bank’s decision.

Central bank deputy governor Mudher Kasim said the custodianship decision was prompted by growing liquidity problems at Warka, its difficulties in meeting depositor withdrawals, and its failure to reach an agreement in talks with Standard Chartered on the foreign bank acquiring a majority stake.

“The bank expanded by giving loans – it appeared collateral for these loans was weak. What concerns us foremost is the stability of the financial sector and depositors’ rights, and thirdly shareholders’ rights,” Kasim told Reuters by telephone from Baghdad.

“This is not a bad bank and was one of the best private banks in terms of assets, technology and the number of its branches, which constituted more than a quarter of private bank branches” in the country, Kasim said.

He strongly denied any suggestion that authorities were victimising Warka. “The bank’s investment ability weakened and if capital drops even by 5 percent, the central bank can put any bank under custodianship. We gave the bank several chances to restructure but this did not work.”

(Source: Reuters)

http://www.iraq-businessnews.com/2012/03/29/warka-bank-saga-shows-iraq-political-business-tensions/

[haymon]

Yeah were great at helping banks out!!

[82Corp.]

I wonder how many US Military or Gov't officials have an account at Warka besides us wee folk.

I am not worried about my money or this bank. Seeing this in the news is good to see.

Thanks for posting.

Goldiegirl

First hand knowledge: A LOT!

Military

DOS

DOD

General Contactors

Business Segments

[coorslite21]

You know this entire investment is a risk........I personally am comfortable with WARKA and I have been able to move funds both ways consistantly thru CITI........the idea is only place as much as you are willing to lose in any of this......

[crusher]

I'm not willing to lose any If I can help it...LOL so I will not be investing in Iraq.

[Goldiegirl]

I'm not willing to lose any If I can help it...LOL so I will not be investing in Iraq.

You're investing in Iraq if you own Dinar.

I'm not going to loose anything from having my money in Warka.

[BrokeNoMore]

As time goes by I am less and less concerned about the situation with Warka.

We aren't going to lose our money.

Warka is the biggest private bank in Iraq. They are one of the richest countries in natural resources in the world, and the CBI needs them, since they have more than a 100 branches all over the place.

In Iraq, Warka is like Walmart here, with 420 BILLION dollars in annual revenue, which is larger than Fannie Mae, General Motors, and Bank of America put together, And the US bailed out all of those companies.

Too big to fail doesn't even begin to describe Warka. Their economy depends on them.

I'm not worried. Not at all.

[20MillionDinar]

As time goes by I am less and less concerned about the situation with Warka.

We aren't going to lose our money.

Warka is the biggest private bank in Iraq. They are one of the richest countries in natural resources in the world, and the CBI needs them, since they have more than a 100 branches all over the place.

In Iraq, Warka is like Walmart here, with 420 BILLION dollars in annual revenue, which is larger than Fannie Mae, General Motors, and Bank of America put together, And the US bailed out all of those companies.

Too big to fail doesn't even begin to describe Warka. Their economy depends on them.

I'm not worried. Not at all.

Hi BrokeNoMore,

Could you please show me where to look to see Warka's annual Revenue, $420 Billion USD seems astronomical for an Iraqi bank! Actually, that is more money than most US banks. Maybe you mean 420 Billion Dinars? I am interested in learning where you have found this information.

Considering the fact that they only have $270 Million USD in deposits I find it hard to believe that they are making $420 BILLION! They had $2 Billion in deposits in 2009... Point me in the right direction sir, thank you in advance.

'We have customer deposits of about $270 million that we have to pay as opposed to a total of $500 million in loans that were owed by clients, and you are not even talking about the assets and real estate and investments,' said Bunia.

[BrokeNoMore]

Hi BrokeNoMore,

Could you please show me where to look to see Warka's annual Revenue, $420 Billion USD seems astronomical for an Iraqi bank! Actually, that is more money than most US banks. Maybe you mean 420 Billion Dinars? I am interested in learning where you have found this information.

Considering the fact that they only have $270 Million USD in deposits I find it hard to believe that they are making $420 BILLION! They had $2 Billion in deposits in 2009... Point me in the right direction sir, thank you in advance.

'We have customer deposits of about $270 million that we have to pay as opposed to a total of $500 million in loans that were owed by clients, and you are not even talking about the assets and real estate and investments,' said Bunia.

I was talking about Walmart's numbers, not Warka's. I did not pull Warka's numbers as there are no bailout comparisons in Iraq that I know of. I was comparing Warka to Walmart, who is three times bigger than the companies that the US bailed out here, just for argument's sake. And that's not earning, it's revenue. And it's retail, not banking. But B of A is banking, and we bailed them out. I'm just saying that Warka is a huge chunk of their economy, and in the banking industry, and they won't let it go flat. Considering the impending RV, they have way too much to lose.

And I'm a ma'am.

[20MillionDinar]

I was talking about Walmart's numbers, not Warka's. I did not pull Warka's numbers as there are no bailout comparisons in Iraq that I know of. I was comparing Warka to Walmart, who is three times bigger than the companies that the US bailed out here, just for argument's sake. And that's not earning, it's revenue. And it's retail, not banking. But B of A is banking, and we bailed them out. I'm just saying that Warka is a huge chunk of their economy, and in the banking industry, and they won't let it go flat. Considering the impending RV, they have way too much to lose.

And I'm a ma'am.

Sorry about that ma'am, my apologies. Thank you for clarifying what you said earlier.

Edited April 2, 2012 by 20MillionDinar

[Goldiegirl]

And I'm a ma'am.

I did not know that. Thank you for letting us know.