he first branch of a UK bank in Iraq has been opened by the country's Prime Minister, Nouri Maliki. Standard Chartered has opened in the country's capital, Baghdad, in a move Mr Maliki said was an "indicator of trust" in Iraq's economy. Another two branches will also open, in Erbil and Basra, by 2014.

The new bank will cater for Standard Chartered's global clients in Iraq, working in oil, telecoms and infrastructure. Mr Maliki said the move would give companies that wanted to invest in Iraq confidence. He said the UK had supported Iraq "from the beginning".

Mr Maliki said: "We were in the same boat at confronting the terrorist organisations and toppling down the former dictator regime.

"We are also in the same boat to seek more improvement to Iraq and to have more building and reconstruction of a new democratic regime in Iraq."

The bank will work with the Iraqi government, its ministries and the Iraqi Central Bank in its advisory role, as well as the country's public sector banks, private banks and local companies. Simon Collis, the UK's ambassador to Iraq, said the UK was dedicated to setting up a "transparent and diversified" financial sector in Iraq.

He said: "For Iraq to realise its full potential and take its rightful place in the global economy, it needs to attract massive investments. The financial sector is key to this."

Mr Collis said the British embassy was working hard to help more British businesses and Iraqi institutions to take advantage of the opportunities in Iraq.