Capital Bank Performance & Strategic Growth
Internal Growth Drivers
Selected Economic Indicators
Iraqi market presents a significant growth opportunity
Growing Oil Production and Capacity
Iraq's daily oil production capacity has grown by over 50%
in the last 6 years, contributing to ~16% of total OPEC
production up from an average of 10% previously.
Despite periods of political instability and lower oil prices,
this will remain a stable/ recurring income source for Iraq.
This was also strengthened by recent devaluation of IQD.
Oil Production, Daily Avg (million barrels)
+52%
4.4
4.6
4.4
4.8
4.6
5
3.0
0
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Role of non-oil sector key to sustainability
Recent devaluation of the IQD strengthened the financial
positioning and ability to cover salaries and internal IQD
commitments. Oil related government revenue however, is
not nearly enough to sustain investments in infrastructure
and other non-salary spending needs.
Foreign currency reserves historically remain strong
(covering ~13 months of imports), given continuous money
flow from oil & gas. However, reliance on funding from
state-owned banks to cover deficits continues.
Overall, there remains major challenges within the
structure of the economy. Increased investment and more
effective execution in non-oil sectors are critical.
Sources: OPEC, World Bank, Central Bank of Iraq
Significant room for GDP growth
Fluctuating GDP, with political instability and economic
weakness continuing to impact economic growth potential.
However the government has taken concrete steps, and
with the help of the international community to start
making reforms and addressing the core issues.
5,955 USD
8,104 USD
33,672 USD
Iraq GDP per Capita
MENA Avg
Oil-Producing GCC Avg
Over 5x of current GDP must be achieved to
reach oil-Producing regional averages. Indicating
significant room for growth in the long-term.
Significant infrastructure needs
Iraqi government requires at least
$100b in reconstruction & infrastructure
projects, which will continue to drive
growth and solidify the role of the
private sector and foreign investor
community.
With gaps in critical defensive sectors
such as healthcare, FMCG & education.
Increased appetite from foreign markets
Iraq is attracting increased amount of
funding lines and financial support from
DFI's, investors and governments. With
increased appetite for US denominated
government bonds.
Ability to mitigate risk through
international insurers such as MIGA, will
further drive private sector investments.
Large young population, tech driven
Over 50% of Iraq's ~40m population falls in
the working population age bracket.
Demand and spending to continue to
increase.
Clear opportunity for digitization and
technological innovation across sectors.
Entrepreneurship hubs and accelerators
are starting to develop, to cater for
ambitious concepts coming to the market.
Improving local expertise
Initially limited involvement of local
entities in the oil & gas/ EPC, as well as
other strategic sectors.
Recently however the trend is reversing
with Iraqi companies gaining technical
expertise leading to a new opportunity of
subcontracting for large global players.
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