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HSBC to buy Iraqi bank
Foreigners have been banned from the industry for 35 years under Saddam Hussein.
May 17, 2005: 2:02 PM EDT

NEW YORK (CNN) - HSBC Holdings, Plc, the London based bank and the world's fifth largest company, said it is in advanced negotiations to acquire a majority stake in Dar es Salaam, the Iraqi investment bank.

HSBC would not provide financial terms of the deal, but Richard Lindsey, a spokesman for HSBC, said it has been pursuing Dar es Salaam since last summer, when HSBC obtained its license to operate in Iraq.

The Iraqi Central Bank has given verbal approval to the deal, which a source familiar with the matter expects to close in July once other regulatory approvals are given.

The deal would give HSBC a 75 percent controlling stake in the privately held bank, which, according to its Web site, has $15,140,506 on deposit.

While it is called an investment bank, Dar es Salaam is also a commercial and retail lender, according to its Web site. Foreign-based banks had been banned from operating in Iraq for thirty-five years under Saddam Hussein's rule.

While HSBC has been operating in the Middle East since 1889, the investment in Dar es Salaam would be the bank's first investment in Iraq.

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