Banking mergers save banks from collapse

2/21/2016 0:00

BAGHDAD - Hussein al-Tamimi Tgb
Panelist for the forum Baghdad economist Samir Nasiri said that the task solutions and essential to overcome the Iraqi banking sector problems currently faced by most of the private banks are expected to face in the future government banks give serious consideration by the Central Bank of Iraq and the Ministry of Finance in collaboration with the Economic Commission of the Council of Ministers and the Association of Banks stage own direction to study and analyze business and financial indicators for the sector of the Iraqi banking results.

Profits realized

He said in an interview for »morning« importance of focusing on deposits, liquidity and financial position, capital and reserves and revenues of domestic and foreign banking operations and profits earned, and more importantly, the economic outlook for the continuing repercussions of the financial crisis plaguing the country during the years 2016 and 2017 in light of the changes and the global economic volatility.

Central committee

And the need to involve the bankers experts in the private sector and take advantage of their experience and the reports of the World Bank about the overall financial situation in Iraq to get out of the outcome of important decisions to save the Iraqi banking sector from collapse through a series of solutions to the most important of the formation of a central committee headed by the Central Bank of Iraq and the membership of the Ministry of Finance and the Finance Committee in the House Iraqi Parliament and the Association of banks, bankers and experts from the government and the private sector holds the study and analysis in the light assign a neutral auditing work according to international standard criteria for determining the efficiency of the performance of each bank.

Lease activity

Alnasiri pointed to the need for classification of private banks, according to the standards adopted in the areas of capital investment and operating cost of operation and activity funding, investment and liquidity ratio and capital adequacy, and the development of services provided to clients and the most important technical development according to modern banking systems, as well as in light of the damage that has borne the banks because of the terrorist acts and distressed debt repayment.

And the importance of the classification of banks into three first orders of large banks, including the size and financial position and financial well-Lease and status, and other medium-sized banks include size and status and financial position average and capable of evolution, and the third includes the banks that suffer from weakness in its banking and downs of the liquidity rates to minimal It is less than 5 percent of the total deposits and real capital of less than 250 billion dinars and distressed debt has more than 50 percent of the paid-up capital and expenditures higher than revenues.

Optional integration

He suggested that the central bank takes Report seed banks rank third Optional merger agreement with another bank or more of the same rank, according to the Article 150 of the Companies Registration Act No. 21 of 1997, and no later than the first quarter of this year, otherwise the central bank applied its powers by requiring these forced banks to merge.

This means the banking merger agreement or union bankers or more amicably (reflex) or compulsory (decision of the central bank) and melt-in-one banking entity and that the new entity has the ability and effectiveness in achieving the objectives of the two banks merged and objectives of monetary policy and the national economy.

Disclosure and transparency

Alnasiri pointed out that the process of banking mergers save some banks from collapse and to require the provision of data and information in accordance with the principle of disclosure and transparency for each bank of the banks covered by the merger, and the feasibility study and expected results at the time of the merger are assessed these studies by the monetary authority before deciding the merger, as well as do structural financial and administrative operations of the target banks before the merger and to identify Manpower Professional and Administrative needed to manage the new entity.

He said that banking mergers if it has, according to the above will check increase the capacity of the new bank to activate the banking activities in all areas, most notably the rise in the capital and revenues of banking operations and financial position, as well as increased net profits that result in increasing the value of its shares in the stock market and increased deposits and rising number of customers and increase the number of its depositors and thereby strengthen confidence which is the most important thing in action Banking.