Iraqi banking sector capital tops 21.4T dinars amid sovereign credit pressures

The new headquarters of the Central bank of Iraq (CBI). Photo: Zaha Hadid Architects Baghdad (IraqiNews.com) – The total capital of Iraq’s banking sector has surpassed 21.4 trillion Iraqi dinars, with aggregate banking assets reaching 155 trillion dinars, according to data presented by the Iraqi Private Banks League (IPBL) on Tuesday, September 22, 2026. Speaking during a financial workshop convened by the Parliamentary Finance Committee and attended by an Iraqi News Agency (INA) correspondent, IPBL Executive Director Ali Tariq delivered a comprehensive overview of the nation’s banking architecture against the backdrop of prevailing macroeconomic and sovereign credit challenges. Tariq outlined core macroeconomic indicators, citing Central Statistical Organization data placing Iraq’s population at 46 million following the latest census, alongside an International Monetary Fund estimate pegging nominal Gross Domestic Product at $264 billion. However, he cautioned that Iraq remains classified in the high-risk, non-investment grade category by Fitch Ratings, carrying a sovereign credit rating of B-minus. He stressed that while this tier reflects an entity’s current capacity to meet short-term debt servicing obligations and interest payments, it signifies acute economic vulnerability, a razor-thin fiscal safety cushion, and severe exposure to external macroeconomic shocks. The minus modifier, Tariq noted, positions Iraq at the absolute lowest threshold of the B rating band, leaving the sovereign profile just one notch away from a downgrade into the CCC category, where default risks become acute and sovereign borrowing costs escalate sharply. Such credit metrics, he warned, inflate bond yields required to entice international investors and complicate sovereign and institutional access to international capital markets while driving up debt insurance and borrowing costs. Turning to the domestic institutional footprint, Tariq detailed the scale of the financial system, which currently encompasses 73 operating banks. This total includes 7 state-owned banks, 55 domestic private commercial and Islamic banks, and 11 branches of foreign banking institutions. The ecosystem is further supported by 18 licensed electronic payment service providers, 3 microfinance entities, and 458 registered foreign exchange and remittance bureaus, forming the backbone of the domestic financial circulation network.