Persian Gulf Banks Eye Return to Iran Market: Report
- January, 20, 2016 - 17:02
- Economy news
TEHRAN (Tasnim) – Persian Gulf banks are seeking a return to Iran’s financial system following the inception of the Joint Comprehensive Plan of Action (JCPOA) between the Islamic Republic and world powers and the subsequent termination of anti-Tehran sanctions, a report said.
Banks from the UAE, Oman, Qatar and Kuwait have spent months drawing up plans for entering the Iranian market, two sources familiar with the matter said, Reuters reported.
“Regional (Persian Gulf) institutions will test the water and other foreign banks will watch to see what happens,” said Stuart Jones Jr., an executive director at EY and a former US Treasury attaché to the Middle East.
“There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran,” he added.
Emirates NBD (ENBD), Dubai's largest lender, has in recent months met with the Iranian business community in Dubai and discussed potential banking opportunities involving Iran once sanctions lifted, the two sources said.
“Any re-engagement with Iran will take place in several stages and will require updates to policies, procedures, systems and controls as well as ongoing communication with regulators and correspondent banks,” the bank said in a statement, adding it did not currently have any material assets or liabilities in Iran.
ENBD and Qatar National Bank (QNB), the Middle East’s largest bank, have representative offices in Tehran, but ENBD's has not been operational since 2008. The status of QNB's office is unclear and the bank did not respond to a request to comment on its Iran plans.
The UAE is Iran's fourth largest trading partner, home to a large number of ethnic Iranians and a channel for consumer goods imports into that country.
The Persian Gulf banks are weighing re-entry into the Iranian financial system after Iranian Foreign Minister Mohammad Javad Zarif and European Union’s Foreign Policy Chief Federica Mogherini on Saturday announced in a joint statement that the implementation of a nuclear deal finalized by Tehran and world powers back in July 2015 has officially been started.
The announcement was made after the International Atomic Energy Agency (IAEA) confirmed Iran’s commitment to the Joint Comprehensive Plan of Action (JCPOA).