American Contractor

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Start of Interview.

AC Question:
What is your opinion on the current rate of the Iraqi Dinar? Do you think an increase in value will occur and if you do when do you think it will happen? What would the economic conditions in Iraq be like for the increase in value of the Iraqi Dinar?

CEO Al-Bunnia:
As you well know, any currency rate in any country depends on the stability of that country in terms of political and security. We hope everyday that both the political and the security situation in Iraq will be more stable than what it is at the present time. The current exchange rate is, in my personal opinion, not a true rate because the dollar exchange rate in Iraq depends on the supply and demand of the said currency. If it was not for the daily intervention of the central bank of Iraq in selling in the range of 500 million dollars per month, one would expect the exchange rate to reach as high level as 5000 dinars to the one dollar. I believe that an increase in value of the Iraqi dinar will not be seen in the short term as the Iraqi government depends on the sale of the dollar to pay the expenses of the government from salaries to the internal contracts. Also, due to the high salaries which are being paid now to the public sector, most government employees will not accept a decrease in their salaries as they were very deprived in the days of the old regime. If this magic wand be struck on Iraq, then I am sure that we will over come all the neighboring countries in their standard of living .

AC Question:
How long have you been in the banking business in Iraq?

CEO Al-Bunnia:
I have been in the financial sector since 1989 after my return from London were I was studying for my master degree, I returned to Iraq after the end of the Iraqi-Iran war were I took the position of the financial director of the al-bunnia group of companies which comprise of 45 industrial,agro-industrial,agricultural and construction companies. I took control of the bank after the death of my father in may of 2003 were I strived to take the bank to be the number one bank in Iraq.

AC Question:
How many branches does Warka Bank currently operate in iraq?

CEO Al-Bunnia:
We started in April 2003 with one branch in Baghdad and now we have 30 branches and hope to open three new branches this month. These branches are located in most of the provinces and in hot areas as I believe that we must be present in these trouble areas because we have to show people that life must keep going and no one , including the insurgents ,should deprive our rights to grow and live in our fathers land.

AC Question:
Do you plan on in the future on opening any future Warka bank offices outside of Iraq?

CEO Al-Bunnia:
Due to the present political struggle and the international court orders that is implied on the Iraqi funds , it is a delicate situation for us to open branches in foreign countries. To over come this problem, we have applied for representation offices for warka bank in Jordan and Bierut which would mean a step towards our aim.

AC Question:
Are you currently working on getting your electronic banking or your Internet banking online? When do you think this will be completed?

CEO Al-Bunnia:
My team and I have been working on this project since may of last year when we bought the core banking system from a reputable English company that specializes in the banking sector. We had very hard time with them to reach were are now. I am happy to inform you that internet banking is only one week away when some of the IT staff returns from Jordan after taking their final training and adding the final touches to the system. I am also happy to inform you that next week we will have SMS,Mobile and phone banking for our customers.

AC Question:
When you have the Internet banking completed will the overseas depositors be able to view their accounts on a secured web site?

CEO Al-Bunnia:
My team and I have been working on this project since may of last year when we bought the core banking system from a reputable English company that specializes in the banking sector. We had very hard time with them to reach were are now. I am happy to inform you that internet banking is only one week away when some of the IT staff returns from Jordan after taking their final training and adding the final touches to the system. I am also happy to inform you that next week we will have SMS,Mobile and phone banking for our customers.

AC Question:
I would like to talk about your services as a bank to your customers. There are a few web sites that report that Warka Bank is very non-responsive to customers that are trying to communicate with Warka Bank in reference to their deposits or information about setting up a new account. The feeling is that Warka is bogged down with emails and this is the reason for the delays in responding back to customers and potential customers. Is this true? If not can you elaborate on the reasons why Warka Bank is slow to respond to queries from your overseas depositors and future overseas depositors?

CEO Al-Bunnia:
To move from a labour intensive operation to electronically generated data is not an easy thing to do especially when people are not used to work in such an environment. As you know the infra-structure in Iraq and especially in Baghdad is very poor. We have overcome most of the telecommunication problems as Iraq had no internet service in the old dark days. If you believe it or not, we had to do our own communication network in order to have the core banking system in operation. I hope that these delays in response will not occur as our overseas customers will be able to obtain all the information on their account through the internet. I am also working now with a software company were it is building me a system that even account opening will be on the net.

AC Question:
I know for over a year that Iraq Govt. CBI and Iraqi customs have been attempting to put a stop to the smuggling of Iraq Dinar out of the country. Do you think the smuggling has increased or decreased as the new Iraq government is almost completed? What is your feeling on the Iraq Dinar speculators that are holding the Iraq Dinar outside of Iraq?

CEO Al-Bunnia:
It has always been the case since many decades ago that Iraqi currency is not allowed to be exchanged or exported outside Iraq. The law is still on now. Nothing deters the Iraqi businessman(smuggler ) from looking at an opportunity and grasping it which will generate him huge profits. Even with sadam stringent fist and control could not stop the smuggling of the Iraqi dinar before the invasion of Kuwait (as after wards there was no value to the Iraqi dinar).My advise to those Iraqi dinar speculators is that they are taking the risk of by buying Iraqi dinar because I really do believe that the currency will be changed in the near future once the government is stabilized and settled and also there is a large number of fraudulent currency moving in the economy in which it will be difficult to control. The reason for that falls in two points. The first point is that the central bank of Iraq is putting an RFP to the supply of printing money machines.

If these changes happen, then how could these speculators return their money when even the international couriers will not ,by their law, accept to deliver the money. A customer of ours did this move and his money was never received by the bank because it was stolen by the people that work in a very well known courier company.

AC Question:
Warka Bank has a program that allows someone to invest in the ISX. Did something occur that triggered Warka bank to do this for their depositors? Can you tell how this come about that Warka is now offering a way to invest in the ISX through a proxy? The stock that is purchased is it in the name of an individual or a company? Can you tell our readers what the name of the company or the individual is?

CEO Al-Bunnia:
As you are aware that foreign investment law is actually into operation in Iraq according to the new constitution. There is also an approval from the prime minister office to start this law. Unfortunately, no one is working on this law as there is no system being incorporated for this purpose at isx. In order to overcome this hurdle, and moving along with the law, we managed to establish a company called showneeze which belongs to the bank were we buy the shares in this name according to the laws and regulations were buy these shares are bought for our foreign customers were each customer has his own share profile in quantity and price bought or sold according to each trading session. Once the law is implemented, in the isx, then we will transfer these chares for our customer in his name with a minimum fee. I believe that this is the time for our customers to buy the shares that they want were we are giving them the opportunity to make good profits since once the country is back to normal and foreign people can buy shares , believe me no one will be able to grab a handful of shares as this could be seen in the neighboring countries. The price of shares are now at its lowest that it will ever get. An example of this would you believe that price of one pepsi cola bottle equates to 100 shares of pepsi colla Baghdad. No one believes this but this the opportunity that I am talking about. or the share capital of a company which is 3 million dollars with assets of 60 million dollars price of share is six dinars.

AC Question:
What are the things that your bank is doing to acquire more depositors specifically in Iraq?

CEO Al-Bunnia:
Retail banking is very hard business in Iraq. In the past rich people are used to put their monies in their homes and not declaring it into the banking sector because they are afraid that it will be confiscated by the old regime. Middle class people could hardly have any savings due to the very low salaries that they used to get. We are attracting those middle class clients to our bank by insuring that their salaries are paid to their accounts in the bank were we give them a loan to buy things that they could not buy with their salaries like household goods. We attract major companies due to the services that we provide them wit like salary payment system, documentary credit, purchase of the dollars from the central bank at a very marginal rate and foreign bank transfer .

AC Question:
Where do you see your bank in 3 years?

CEO Al-Bunnia:
I see the bank in three years time to still be the number one bank among the people of Iraq were I aim the bank to be called the people bank. This I hope will eliminate the competion of foreign banks coming into Iraq as they will only attract the cooperate banking sector.

AC Question:
Are Iraqi’s getting more comfortable with depositing their salaries and money inside the banking institutions in Iraq? If not what is Warka Bank doing to eliminate this fear of depositing money in Iraqi Banks?

CEO Al-Bunnia:
Yes they are for the reasons that I mentioned earlier . we are attracting them to be able to take their families and go to holiday by giving them deferred and installment holidays . there are other services which I would like it to be a surprise when the time comes.

AC Question:
Warka Bank has been very good at providing a service to the overseas depositors by enabling them to set up bank accounts with your bank. How is it that no other private Iraqi Bank has taken this step in allowing citizens outside of Iraq to open bank accounts with them? Is Warka Bank following a gray area in Iraqi banking laws in the opening of the overseas accounts?

CEO Al-Bunnia:
People think that warka bank follows, as you say gray area in Iraqi banking laws. I do not blame them for their thinking as how come warka bank managed to increase its share capital from 1.5 billion dinar to 30 billion dinar with reserves of 20 billion dinars. How could warka bank in a period of 2.5 years manage to be the number one bank in everything. The answer is very simple; I have a reputable name that all the people in Iraq trust and know I do not steel and take commissions from bank business transactions.
I dedicate all my time and effort on the running of the day to day operation of the bank.
I aim to be the best in everything. And above all , I have the full support of my faithful management and staff of the bank.

End Of Interview

Interview Date June 6, 2006

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