Here’s How Iran Will Rejoin the Global Financial System

For Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system, the Society for the Worldwide Interbank Financial Telecommunications, is used to transmit payments and letters of credit. A senior official with Iran's central bank said that all the private and state-owned banks have taken the necessary bureaucratic steps, regarding rejoining the SWIFT system. While international banks are expected to link up with their Iranian counterparts via SWIFT, Iran will also be looking to encourage foreign institutions to expand involvement in the country’s financial system. But for many foreign banks, there are concerns about being caught up in ongoing U.S. sanctions.

Iran's financial regulator plans mortgage-backed securities market

Iran's capital market regulator wants to develop a market for mortgage-backed securities (MBS) and has published rules covering them, the latest move by authorities to revamp the financial sector. MBS could help to stimulate the debt market and spur housing construction in the country of about 80 million people. Iran has seen some issues of MBS but on a small scale, and active trade in them has not developed. The new MBS rules, released by the SEO last week, include strong consumer protection features. They also feature some particularly Iranian aspects that make them different from similar securities elsewhere. The central bank uses tools such as reserve requirement ratios and open market operations to conduct monetary policy.

Persian Gulf Banks Eye Return to Iran Market: Report

Banks from the UAE, Oman, Qatar and Kuwait have reportedly spent months drawing up plans for entering the Iranian market. There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran, according to Stuart Jones Jr., an executive director at EY. 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, Emirates NBD said, adding it did not currently have any material assets or liabilities in Iran. The Persian Gulf banks are weighing re-entry into the Iranian financial system after it was announced that the implementation of a nuclear deal finalized by Tehran and world powers back in July 2015 has officially been started.

Iranian bank’s frozen assets in Germany unblocked

Abdolnaser Hemmati, the CEO of the National Bank of Iran (known as Bank Melli Iran or BMI), said that frozen assets of the bank at the Deutsche Bundesbank were freed. Following the move, 17 BMI subsidiaries will be able to work abroad. Deutsche Bundesbank authorized BMI’s branch in Hamburg, and the BMI’s Dubai branch has also been freed of transaction barriers previously in place under sanctions. Measures have been taken to launch the London branch of the BMI. Only a UK permit is left to be issued, he added. Mir Business Bank CJSC, a BMI branch in Moscow, can also resume its full operations, according to Hemmati. In one week, all BMI branches abroad will be operational, he stated.

Iran to get $32 bln of unfrozen assets after sanctions end

Iran will receive $32 billion of unfrozen assets after sanctions were lifted in a deal with world powers over its nuclear programme, Iranian central bank chief Valiollah Seif said Tuesday. Seif was quoted as saying that $28 billion (25.8 billion euros) would go to the central bank and $4 billion will be transferred to the state treasury as the share of the government. The unfreezing of assets comes after the U.N. atomic watchdog confirmed at the weekend that Iran had complied with measures imposed by the deal with global powers reached in Vienna in July. The central bank plans to keep the funds in centralized and safe accounts abroad, he added.

UN Security Council removes Iranian bank from sanction list

The United Nations Security Council announced on Sunday that it has removed Iranian Bank Sepah and its international subsidiary from a sanctions list. This move came after Saturday's announcement of a UN report confirming that Iran has completed necessary preparatory steps to start the implementation of a plan of action aiming to resolve the nuclear issue. Bank Sepah had been under a Council-mandated asset freeze since 2007. It provides support for the Aerospace Industries Organisation (AIO) and subordinates, including Shahid Hemmat Industrial Group (SHIG) and Shahid Bagheri Industrial Group (SBIG), according to the UN website.

Islamic Development Bank looks to sukuk for Yemen reconstruction

The Islamic Development Bank wants to use Islamic bonds to help finance the reconstruction of countries ravaged by conflict, with the World Bank as a potential joint issuer, the head of the multilateral lender said.
Refugee and reconstruction financing is a priority for the Jeddah-based IDB, which last month launched an initiative with the World Bank and United Nations to help more than 15 million people displaced across the region.
Work is now underway to identify specific projects for the initiative, with a priority on war torn Yemen, which could see the IDB and World Bank as issuers of the sukuk.
"We need to finalize this with the World Bank, but most likely it will be a joint issuance", IDB president Ahmad Mohamed Ali said on the sidelines of an industry conference in Kuwait.
The IDB, which operates to promote economic development in Muslim communities, has 56 member countries including Saudi Arabia, Libya and Iran as its largest shareholders.

Iran issues $300m equivalent domestic bond

Iran, frozen out by sanctions, has not been a fixture in the international debt markets since 2002. But when it eventually returns, which it surely will in the next year or so, its first step back may turn out to have been a little-noticed domestic issue that took place on September 30. The issue of Islamic government treasury bills, it could even be said, was the country’s first true domestic bond. There has been a sort of debt market in Iran for years, but it does not resemble anything like local currency markets elsewhere in the world. The predominant vehicle is the Agh Mosharekat (participation paper) an instrument which carries a fixed coupon, is not tradable, and can be returned to the bank at any time during its (typically three-year) duration and redeemed.

Iran's Saman Bank to enter Turkish market

After Bank Mellat obtained the right to expand its operations in Turkey in March 2014, Iran's Saman Bank has also applied to the Central Bank of the Republic of Turkey (CBRT) and the Banking Regulation and Supervision Agency (BDDK). The BDDK is now considering the Iranian bank's request; BDDK is expected to issue a reply around New Year's. Bank Tejarat and Pasargad Bank are also expected to reapply to be involved in the Turkish finance market after Saman Bank's application is approved. The approval of the expansion request of Bank Mellat, which had not been operationally active in Turkey due to sanctions and had downsized in 2012, also raised hopes for other banks.

Refugee Bank to provide financial inclusion for refugee crisis

The Digital Finance Institute, a Canadian not-for-profit, has entered into an arrangement with an Iranian firm and as the first part of the arrangement is joining forces with Sana Pardakht. The two sides will have bilateral cooperation on the role of innovation labs to drive technology, banking and finance, Bitcoin, smart cities and renewable energy, emerging payments, Iran’s potential to emerge as a finance hub post-sanctions, business opportunities in Iran and the growing importance of social banking with a case study on payments to solve financial inclusion for the refugee crisis.

The promise and peril of Iranian stocks

Iran has long had a hard time attracting foreign cash. But with this summer’s historic nuclear deal, foreign investors are finally eyeing the pariah nation. Investors, though, are going in with their eyes open to the numerous obstacles, such as limited company transparency, a small number of outstanding shares for trading, a lack of custodial services and high inflation. Most foreign entities aren’t yet legally allowed to buy shares on the Tehran Stock Exchange (TSE). Still, more foreign buyers are now considering the Iranian equity market because, over the next six to 12 months, they’ll likely be able to access the TSE as the nuclear deal takes effect.

Iran’s Bank following new funding method

The Iranian Bank Maskan (bank for housing) has undertaken a new method of financing projects to help urban development and land added value growth. Addressing the Iran Transportation and Urban Development Summit, Bank Maskan CEO Mohammad Hashem Botshekan said the bank is working on an asset management method different from the structured financing in which each project has its specific funding prescription.

Lifting of sanctions will boost Islamic finance in Iran: S&P

The agreement Iran has reached regarding its nuclear programme could bring about its eventual economic rebound, and help boost Islamic finance, according to a report published by Standard & Poor's Ratings Services titled ‘Lifting sanctions augurs well for Iran's economy and the growth of Islamic finance’. Iran agreed the joint comprehensive plan of action with the P5+1 (China, France, Russia, the UK and the US plus Germany) in July. If the agreement is approved and Iran meets all deliverables, sanctions may start to lift in the first half of 2016. The World Bank estimates this would help Iran's oil exports rebound to pre-2012 sanction levels within 8-12 months. Sanctions lifting could also restore Iran's access to the global financial markets.

Islamic banks to benefit from Iran’s opening up

As the Iranian economy opens up for business, regional Islamic banks are likely to benefit most as the country’s banking system is governed by Sharia, according to Moody’s. According to the Central Bank of Iran, the country’s banks and other financial institutions held 15,901 trillion Iranian Real ($558 billion) in total assets as of May 2015. Given the sheer size of the banking system and the country’s financing needs, Moody's expects a major boost to sukuk volumes, said Khalid Howladar, senior credit officer at Moody’s. However, Sharia harmonisation across jurisdictions would likely remain difficult, he added. Iran's banking sector is the largest contributor to the global total of Islamic banking assets estimated to account for 45 per cent of $1.2 trillion market.

Terror Award Against Iranian Bank Upheld

After a Hamas-sponsored cafeteria bombing at Hebrew University in Jerusalem, a federal complaint was filed against Iran's central bank in Washington D.C., that ended in a $12.9 million judgment against the republic. Other lawsuits alleging that Iran bankrolled terrorism followed, leading to awards of $20 million for a bombing of a Jerusalem restaurant, $350 million for a 1990 mass shooting, and $590 million for the bombing of the Khobar Towers in Saudi Arabia. Bank Melli has set forth numerous creative arguments as to why it shouldn't be liable for Iran's debt. However, the Ninth Circuit ruled Wednesday that those arguments cannot save it from paying nearly $17.6 million to the victims of terrorist attacks in Israel, Saudi Arabia and elsewhere.

Iran, Azerbaijan to establish joint bank - minister (EXCLUSIVE)

Iran and Azerbaijan discuss creation of a joint bank and the opening of branches of the two countries' banks in Baku and Tehran. There is a branch of Bank Melli Iran in Azerbaijan, but it is not active, Iran's Minister of Communications and Information Technology Mahmoud Vaezi said, adding that preliminary talks on these issues were already held. Branches of the new bank will operate in both Azerbaijan and Iran.

What Global CEOs Will Encounter as They Seek to Profit in Iran

Iran’s $415 billion economy is the second-largest in the Middle East after Saudi Arabia. Unveiling his nation’s economic plan for the next five years, Supreme Leader Ayatollah Ali Khamenei said last month that Iran must aspire to average annual growth of 8 percent. The economy may grow 4 percent this Iranian financial year, double the pace expected before the nuclear deal, according to the deputy governor of Iran’s central bank. An OPEC member, Iran holds 10 percent of the world’s oil reserves. Revenue from crude sales represents just 15 percent of Iran’s GDP. Investors may prefer the car industry, manufacturing, energy and agriculture.

Iran asks to return money from bankrupt bank in Azerbaijan (exclusive)

Iran has asked the government and the Central Bank of Azerbaijan (CBA) to return the assets of Iranian entities remaining on the accounts of bankrupt Azerbaijani Royal Bank. Officials have appealed to the Azerbaijani government and CBA on the issue of solving the problem with the money of the Export Development Bank of Iran and other entities of the country, which remained on the accounts of Azerbaijani Royal Bank, which has declared its bankruptcy.

Hedge Fund’s Tehran Trip Shows World’s Ready for Iran Bonds

In the aftermath of Iran’s deal earlier this month with international powers to end sanctions, investors like Hans Humes are anticipating new bonds from Iran. As Iranian officials were in Vienna hammering out terms of the nuclear accord, Humes, a New York-based hedge fund manager, said he’d be a buyer when the nation starts selling debt to finance projects that weren’t viable under the sanctions. Before Iran can access overseas markets, the U.S. and European Union will need to lift a complex web of sanctions, which mainly include a ban on its lenders from dealing with Iran and Iranian banks’ access to the leading global financial-messaging system known as Swift.

UPDATE 2-With nuclear deal done, Iran sets out to reassure wary Gulf Arabs

Iran's foreign minister Mohammad Javad Zarif called on Sunday for a united front among Middle Eastern nations to fight militancy, in his first regional trip since Iran reached an agreement with world powers on the country's nuclear programme - an agreement that raised fears among its Gulf Arab neighbours. Most Gulf Arab states are worried that Iran's July 14 accord will hasten detente between Tehran and Washington, emboldening Tehran to increase backing for Middle Eastern allies at odds with Gulf Arab countries. Most Sunni Muslim-ruled Gulf Arab states have long accused Tehran of interference in Arab affairs, alleging financial or armed support for political movements.

Syndicate content