Mazin al-Rawe, executive manager of Iraq's Al Khair Financial Investment Co., said the bank's establishment would be announced as soon as the Central Bank of Iraq issued a license.
"The Central Bank of Iraq is about to issue the license and after that we will start serious steps to set up the 'Saudi-Iraqi Bank'," al-Rawe told Dow Jones Newswires.
Saudi Arabia's Mansour Almalek Holding Co. will hold slightly less than half of the shares in the bank, which will be capitalized at $32 million.
Al Khair will acquire $10 million of the shares, with the remaining investment coming from an initial public offering on Iraq's stock exchange, he added.
An executive with the Saudi firm confirmed the planned Iraqi joint venture but declined to comment on the deal, saying an announcement would be made in due course.
"We have full confidence in the future of Iraq and plan more investments there," the executive said.
Riyadh-based Mansour Almalik invests in power and energy projects, real estate and military logistics.
Central Bank officials couldn't be reached for comment Monday.
Al-Rawe said the joint venture bank will appoint one or two Saudi members to its board of directors.
The Saudi firm is also partnering in a new insurance firm.
Mansour Almalik has also taken a 20% stake in the 1 billion Iraqi dinars ($660,000), newly-established Al Khair Insurance Co., according to cofounder Lubna Anwar Abdul Saheb.
"Despite the bad security situation, Arab businessmen are eager to invest in Iraq and send their money here," she said.
An initial public offering will raise 49% of the insurance firm's equity, with founding investors contributing the remainder, said Abdul Saheb, who is one of these founders as well as chief executive of Al Waha Stock Brokerage House.
The Central Bank of Iraq last year issued a new law allowing foreign banks to acquire unlimited shares in private Iraqi banks.
Since the fall of Saddam Hussein's government in April 2003, the central bank has awarded a number of licenses to Arab and international banks to operate in Iraq.
HSBC Holdings PLC (HBC), Standard Chartered PLC (STAN.LN) and the National Bank of Kuwait SAK (NBK.KW) were the first three foreign banks to win licenses in 2003.
Arab Bank PLC (ARBK.AJ), Arab Banking Corp. (ABC.BH), Iran's Bank Melli, the Agricultural Bank of Iran and the Agricultural Bank of Turkey also won licenses.
HSBC and NBK have signed contracts to take stakes in private Iraqi banks.
-(Source) By Dow Jones Newswires' Baghdad Bureau