Five finalists set for Iraqi trade bank

Five finalists set for Iraqi trade bank

Reuters, New York

Five consortium led by U.S. banks, along with a lone British bank, have made the final round as applicants to head the newly- established Trade Bank of Iraq, The Wall Street Journal reported on Tuesday.

A selection panel will hear presentations from the six finalists on Tuesday and Wednesday in Bahrain, and U.S. officials expect to make their decision within days, the report said, citing Peter McPherson, the head adviser to the U.S. Treasury in Baghdad.

Bids from three groups of banks have been rejected, the report said. The final consortia are led by U.S. firms Bank of America Corp, Bank One Corp, Citigroup Inc., J.P. Morgan Chase & Co., and Wachovia Corp.

Britain's HSBC Holdings Plc is the only bank under consideration as a single entity. An HSBC spokeswoman said the company was "looking at the possibility of participating in the financial reconstruction of post-war Iraq" but she had no immediate comment on the newspaper report.

The winning bidder will manage Iraq's trade bank, which will make it possible for Iraqi agencies and oil concerns to buy big- ticket items from other countries using letters of credit.

U.S. estimates indicate business at the bank could swell considerably, from $100 million a month initially to as much as $500 million a month, when the country's oil sector recovers, the newspaper said.

The selection could prove sticky, as several of the groups of finalist banks include a partner from a country that opposed the war in Iraq, according to The Journal. U.S. officials have indicated an interest in selecting a winner with a broad international base and ties to the Middle East.

McPherson said Citigroup has joined forces with Germany's Deutsche Bank AG, Barclays Plc, Sumitomo Mitsui Financial Group Inc, and Poland's Bank Handlowy, according to the report.

France's Credit Lyonnais is part of J.P. Morgan Chase's group, while Societe Generale has allied with Wachovia, which leads a group of about two dozen banks, the largest group in contention.

A four-person panel will recommend one finalist to Paul Bremer, the chief Iraq administrator, the newspaper said.