Wadee Al Handal Highlights Transformational Reforms in Iraq’s Banking Sector During Interview with Al Arabiya Business

On April 28, 2025, during an exclusive interview with Al Arabiya Business, Mr. Wadee Al Handal, Chairman of Al Handal International Group and President of the Iraqi Private Banks League, outlined major developments and strategic reforms underway in Iraq’s banking sector. He revealed that over the past two years, Iraq has attracted approximately $63 billion in investments, resulting in a significant rise in financial inclusion, now reaching 46% nationwide. These advances reflect strong government momentum toward economic modernization and fiscal localization.

Key Highlights from the Interview:

• $63 billion in investments have entered Iraq over the last two years, fueling growth and expanding access to financial services.
• The Iraqi government is prioritizing the localization of salaries in both public and private sectors to further integrate citizens into the formal banking system.
• In response to global financial compliance challenges, Iraq is working to restructure its banking sector, aiming to consolidate 35 banks into 7–10 stronger institutions.
• These bank mergers are expected to take place within the next two to three years, mirroring successful models in the Gulf Cooperation Council (GCC).
• The restructuring will enhance the efficiency and resilience of Iraq’s banking institutions, enabling them to play a more active role in supporting the local economy.
• Five banks have already signed Memoranda of Understanding (MoUs) with the Central Bank of Iraq, initiating formal merger processes.
• These institutions have affirmed their financial solvency, assuring the public that customer deposits remain secure during the transition.
• Proposed incentives to support the mergers include low-interest deposits of up to $100 million over five years and access to oil sector transactions, currently dominated by public banks.
• The Central Bank of Iraq, with over $110 billion in reserves and 45 tons of gold, is providing critical support for this transformation.
• Mr. Al Handal emphasized that successful mergers will serve as a model of reform and resilience, fostering greater confidence among investors, stakeholders, and citizens alike.