Yesterday, Citigroup Inc. (C) and Bank of Baghdad (BoB), a subsidiary of Kuwait’s Burgan Bank, entered into a strategic alliance. The partnership will provide cash management requirements and other related banking services to corporate clients with major business in Iraq.

BoB’s services to Citi’s clients includes a number of comprehensive products and service portfolios encompassing account services, payments and collection both domestically and internationally, liquidity management and electronic banking solutions, supported by a complete customer service and modernized documentation processes.

Citi is satisfied with the deal as it will help the company to fulfill its commitment to Iraq as well as maintain their strategy to meet clients’ needs through their own global network and partnerships with prime local banks.

On the other side, the deal facilitates BoB in leveraging Citi’s global network across 100 countries for cash management solutions and other banking services. Further, the alliance joins BoB’s broad network in Iraq, product suite and service brilliance with the global reach of Citi. The deal will provide valued clients of both firms as well Burgan Bank group clients with modified solutions and help them with their operations in Iraq.

Established in 1992, Bank of Baghdad was the first licensed bank in Iraq. The bank provides retail and corporate banking services through 36 branches and over 30 ATMs network. Bank of Baghdad is listed on the Iraqi Stock Exchange. Burgan Bank Group includes key subsidiaries such as International Bank, Gulf Bank Algeria, Bank of Baghdad and Tunis Jordan Kuwait Bank.

We believe such strategic moves in the market will enhance Citi’s client network globally and would help the company in sustaining its market share in uncertain economic environments.

Citi currently retains its Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we maintain a long-term Neutral recommendation on the stock. Citi’s closest competitor, Fifth Third Bancorp (FITB) also retains a Zacks #3 Rank (a short-term Hold rating).

 
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