Annual Report 2008 Strong Performance Has Combined with Several New Initiatives to Determine Exceptional Growth
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Opening doors to opportunity Annual Report 2008 Strong performance has combined with several new initiatives to determine exceptional growth Our Vision To be the leading financial services provider in Iraq, and to consistently meet or exceed customer expectations. Our Mission To provide leading financial service solutions that contribute to and support the long-term well being and success of all our customers, our country and our worldwide partners. Our Values guide everything we do: Trust and Integrity; Mutual Respect; Teamwork and Commitment; Excellence and Innovation. Bank of Baghdad is a member of the KIPCO Group Over 27 years in the financial services industry The KIPCO Group is one of the biggest diversified holding companies in the Middle East and North Africa, with assets worth more than US$19 billion under management or control. The Group has substantial ownership interests in a portfolio of over 50 companies operating across 21 countries. The company’s main business sectors are financial services and media. Through the subsidiaries and affiliates of its core companies, KIPCO also has interests in Real Estate, Industry, Healthcare and the Management & Advisory sector. KIPCO’s financial services interests include holdings in commercial and investment banking, asset management and insurance companies. The Group’s core operating companies in this sector include United Gulf Bank, Gulf Insurance Company and Burgan Bank. 2008 WITNESSED A MASSIVE IMPROVEMENT IN THE QUALITY OF THE BAnk’s BRANCH PRESENtatiON. NEW BRANDING APPLicatiONS, FITTINGS AND SIGNAGES WERE APPLIED at OUR NEW PROTOTYPE REGIONAL BRANCH IN ERBIL, READY FOR ROLL OUT acrOSS THE FULL BRANCH NETWORK. 2 I Bank of Baghdad Annual Report 2008 Financial Highlights Bank of Baghdad concentrated primarily on strengthening its position during 2008. The bank’s asset base increased to IQD 542.2 billion compared to IQD 363.7 billion in 2007. A steady increase in net income was reinvested to capitalise on future opportunities, resulting in a net operating profit of IQD 21.9 billion. 93.3 542.9 22.4 19.3 43.7 21.9 16.6 76.1 32.3 363.7 59.5 331.2 9.6 17.7 3.6 ) ) ) ) ) QD QD QD QD QD Billions (I Billions (I Billions (I Billions (I Billions (I 08 07 06 08 07 06 08 07 06 08 07 06 08 07 06 Total Assets Operating Net Operating Shareholders’ Net Income Revenue Profit Equity Bank of Baghdad Annual Report 2008 I 3 Chairman’s Statement On behalf of the Board of Directors, it is our pleasure to present the annual results of Bank of Baghdad for the year ending 2008. Bank of Baghdad concentrated primarily To support this human endeavour we have on strengthening its position during 2008. reinforced the IT operational efficiency of The bank’s asset base increased to IQD 542.2 the bank by updating all of our core banking billion compared to IQD 363.7 billion in modules; looking for complimentary systems 2007. A steady increase in net income was to our core banking practices. The result of reinvested to solidify and capitalise on future this is proven by increased levels of customer opportunities, resulting in a net operating service across every delivery channel. profit of IQD 21.9 billion. Our IT infrastructure was divided into two The bank’s operating revenue grew from distinct areas, reinforcing banking operations IQD 32.3 billion in 2007 to IQD 43.7 and introducing innovation. An example is billion in 2008, with major reinvestment to our growth in the provision and linking of strengthen our capabilities in infrastructure new ATM locations and the issuance of new and operations – boosting our resources debit cards. to build for the future. Despite the global I am pleased to announce further key economic crisis, Iraq has continued on its achievements this year: journey of growth and recovery, building its infrastructure and national capabilities. Bank of Baghdad has started issuing ATM debit cards that can be used worldwide The recent drop in oil pricing as a result of through MasterCard. We have launched our the sub-prime collapse has been offset by new Erbil regional headquarters as a ‘Regional new initiatives in economic restructuring, Branch’ to service the Northern Province with and I am pleased to announce that your bank increased efficiency, forming a link to several has capitalised on many of these initiatives, branches and a centralisation of our northern becoming more global in its outlook and operations. Erbil now also boasts a state-of- winning significant international business. As the-art branch experience for customers, a result we have been able to focus on many which will be implemented right across our new initiatives. branch network in time. The bank has invested considerably in As a result of these initiatives, your bank its human capital, improving skills and has become recognised internationally. The efficiencies through the creation of additional increase in our service presentation efficiencies training courses, performance appraisals and has created increased customer satisfaction, motivational systems. Bank staff turnover in and we have embarked on a period of 2008 was virtually nil, proving new confidence significant international business acquisition, and professionalism amongst our staff and attracting major corporate businesses creating a solid platform of efficiency for the and forming a solid focus for the inward future. investment vital to the growth of Iraq. 4 I Bank of Baghdad Annual Report 2008 Bank of Baghdad has Our activity during 2008 has placed Bank of In closing, I would like to thank my fellow become recognised Baghdad in a strong position to face future Directors and our Management for their challenges. We face an ongoing need for strong commitment and unwavering internationally. training and advancement of employee skill dedication to the long term success of our Increased service levels and this need represents an ongoing bank. I would also like to thank every member efficiencies have focus for our management. of our team – from front-line tellers to back office support staff – for supporting our Bank of Baghdad operates in a country created increased endeavour, for being adaptable to change whose re-emergence is not yet complete: and for their commitment to continual customer satisfaction, The country’s infrastructure – power, improvement. I would also like to thank the allowing us to telecommunications and the like – continue to Central Bank of Iraq for their wisdom and be reinstated and security issues over the last embark on a period of guidance. Above all, I thank our customers year have improved considerably. To that end, international business for their confidence and continued support Bank of Baghdad is now introducing CCTV of the Bank of Baghdad. I look forward acquisition, forming security technology, complimenting existing to announcing many new initiatives and security systems but reducing the need for a solid focus for the successes in 2009. inward investment such human resource. vital to the growth of The biggest challenge facing business in Iraq Iraq. is stability and while this is improving, there is much work to be done. The recovery of the general economy is an accelerating one. Bank of Baghdad is wholly committed to such Emad Ismail Shareef recovery and is now looking ahead to an era Chairman of the Board of ever increasing stability and reconciliation in Iraq. The decisions that we have made this year, and those of past years, have created an infrastructure for the bank that will allow us to fully capitalise on new emerging opportunities. We are confident of increasing the bank’s international exposure and, in line with a decision of Government to distribute a portion of trade business volume in Iraq to private banks, we are now increasing our trade finance capability accordingly. Bank of Baghdad Annual Report 2008 I 5 Annual Review We have made massive strides in the advancement of our earlier stated priorities in raising our business performance and growth, focusing on the further development and implementation of our strategic goals. In 2008 we continued to enjoy the full continue to enter into ever more productive KEY ACHIEVEMENT: commitment of our Board and employees dialogue with key business and corporate New Erbil Branch in realising our vision of being Iraq’s best customers. Bank of Baghdad embarked financial services provider, through delivery The results of all our efforts are witnessed by on a programme of change of the best customer service, the best products a growing staff confidence within the bank for its branch network during and the best technologies. 2008. A new suite of graphic and this in turn has seen ever higher customer systems were developed and We have made massive strides in the focused results being achieved. implemented through identity advancement of our earlier stated four and environment guides that Marketing / Bank of Baghdad has embarked strategic priorities in raising our business address the bank’s requirements on a new wave of proactive marketing of its performance and growth: customer for signage systems, point of sale, products and services, reaching out to the merchandising and information relationships; branch expansion; sales culture; community in several key areas to promote provision. This was combined technology and operational excellence. The the significant advancement of our banking with a branch fit out programme. progress made in 2007 has been built upon The bank’s premises department offerings. We have created general awareness further this year, and this is having a positive worked with architects and campaigns to coincide with the opening of our impact for all our areas of businesses. contractors to develop a new regional branch in Erbil. complete new customer Bank of Baghdad has focused on many areas, experience in our branches. The In addition, we introduced debit cards that can but of vital importance during 2008 was first prototype for the bank’s new be used internationally, and we have promoted branches is at Erbil.