HSBC to put its majority stake in Dar Es Salaam on the block

City A.M. Reporter
HSBC is considering selling its majority stake in Dar Es Salaam (DES) Investment Bank, which has made it the main international lender in Iraq, the bank said yesterday.

There has been speculation in the Iraqi banking market about the 70.1 per cent holding for some time and Simon Cooper, HSBC’s chief executive for the Middle East and North Africa, told reporters in April its presence in Iraq was under review.

“Following a strategic review, it was decided to explore options for the disposal of HSBC’s shareholding in DES,” the lender said in a regulatory filing, adding it would not participate in a proposed capital increase for DES.

As part of a three-year global restructuring, HSBC has cut retail banking business in some Middle Eastern nations and merged its operations in Oman with a local bank. It has also scaled back its Islamic banking operations.

Selling its DES stake could be complicated by the domination of Iraq’s banking sector by two state-owned lenders – Rafidain and Rashid – with the rest divided among a large number of small players.

DES, which focuses on corporate and consumer banking and has 14 branches in Iraq, has had a partnership with HSBC since 2005.