Iran sanctions: special focus
Euromoney investigates how the relaxation of western sanctions on Iran – dubbed the world’s most lucrative closed economy – will jump-start trade and capital flows from Europe to the Gulf, and plots a vision for the country's banking system and economic transformation, more generally.
Closure of second investigation brings embarrassing episode to an end.
The Trump administration has begun the process of ostracizing Iranian finance. Bankers there are hanging on to some rare good news, but how long will it be till they are back to square one?
In early 2016, the Middle East’s two largest countries looked set to become the world’s most vibrant frontier markets. Two years on, many bankers doubt that either Iran or Saudi Arabia can live up to these expectations.
Europe may not be enough after Trump’s withdrawal from the Iran deal.
Iran's best bank: Ayandeh Bank
Donald Trump fired Secretary of State Rex Tillerson on Tuesday, the latest sign of his opposition to the Iran nuclear deal, an international agreement that has allowed the country’s banks partial re-entry into global finance after years of sanction-fuelled isolation.
Turkish banks’ dependence on external funding was back in focus in January after one of the country’s leading bankers was found guilty of involvement in a multi-billion dollar scheme to evade sanctions on Iran.
The Belt and Road Initiative offers much to the disparate markets of the Middle East and Africa, but not all those countries seem so enthusiastic in return.
It was a year of tremendous change for Iran’s banking sector as the country continued to open up to the world thanks to the effects of the nuclear agreement.
Banks in Iran have made progress since the signing of the nuclear deal, yet many obstacles to doing business internationally remain; for every step forward, there seems to be one back.
Commerce could reverse Trump’s vow to dismantle the Iran nuclear deal.
Immediately after Donald Trump’s election victory, Euromoney visited Tehran to gauge the reaction of one group likely to be affected more than most – Iran’s banking community. Throughout his campaign Trump threatened to tear up the nuclear agreement that has allowed Iran to take its first tentative steps towards international rehabilitation. But bankers in Tehran are determined to hold on to their hard-won gains.
The country’s financial system is still not easy to access; money has trickled rather than flooded into its stock exchange since January’s deal with the US to lift sanctions. Nevertheless, as the country emerges from years of isolation, important changes are taking place that could herald a new era for Iran’s capital markets.
Iran best bank: The financial year under consideration was another painful one for Iranian banking, as international sanctions continued to exert huge pressure on the country’s ailing economy.
The sovereign is still high risk, but is improving in Euromoney’s country risk survey, underpinned by the recent election results.
The lifting of sanctions meant a stream of international banks would make their way to Iran, right? Wrong. Some banks admit they are taking the first steps on the road to Tehran. Others might be, but they certainly do not want to talk about it. And in either case, there are plenty of barriers to getting there.
When Iran Air needed some Boeing spare parts before sanctions were lifted, JPMorgan took the US side of the trade. Why and how?
It wasn’t quite John Simpson on the plane with the Ayatollah returning to Iran in 1979, but nonetheless Euromoney experienced a bit of history in January.
Sanction removal unveils Iran currency hopes January 2016
Iran is emerging from the shadows to re-establish itself as a prime player in the Middle East. Moves are afoot to rid the country of its black-market exchange rate and develop a working currency forward market.
The planned removal of some sanctions on Iran creates opportunities for transactional business, but reputational risks and compliance challenges mean the country will remain a no-go for international lenders.
Interest rate of 26% for 165-day notes; international return inked in for 2016.
What's in a name? Plenty, it seems, if it's similar to one on a sanctions list.
Overall clarity still lacking; US financial system firmly out of bounds.
The debt case for Middle East investment September 2015
Saudi Arabia and Iran have been presented chiefly as an opportunity on the equity side, but both markets are attracting interest from the fixed income community as well.
The country’s return to the fold of international finance is likely to be as long and winding as the road to the lifting of sanctions. But that hasn’t stopped forward-thinkers in Tehran’s financial elite plotting a vision for their banks and financial markets. Can it possibly live up to its billing in some quarters as ‘the most exciting investment in the world’?
Iran is big. Iranians are fond of telling visitors that it experiences four distinct climates at any one time, from snowbound mountains to deserts, and its 80 million people are spread across a multitude of diverse locations outside Tehran; indeed, the tourist industry, should it ever truly take off, will be pretty much everywhere but the traffic-throttled, daunting sprawl of the capital.
The contingent lifting of western sanctions on the world's biggest untapped market has been met with cautious optimism by the financial industry.
Well-functioning stock market; structural surprises still likely.
The security crisis brought on by the rise of Islamic State could turn Iran from pariah to much-needed partner to the west. Financial sanctions have hit both Iran’s economy and its banks hard. Inflation is rampant, NPLs are soaring, while banks lack capital. Corporates can’t get the funding they need. Local bank chiefs are itching to open their doors once again to foreign counterparties. If sanctions are lifted, what will the world’s bankers find in Tehran and beyond?
Mellat leads legal action against UK; lifting sanctions only half the issue.
Iran and the west don’t have to be friends, but there will be big benefits from a rapprochement.
Some banks are national powerhouses, building out across the region; others are already regional players, with individual markets creating something greater than the sum of their parts.
After the Iranian Revolution overthrew the Shah in 1979 and the Grand Ayatollah Ruhollah Khomeini launched the Islamic Republic that exists today, there were a lot of assets the Shah and his followers had left behind as they fled Iran.
Few bank mergers anywhere in the world have been more ambitious than the one that created Bank Ayandeh in Iran in 2013. It combined Tat Bank with two other financial institutions and 10 credit cooperatives, and did so in a country that has absolutely no regulatory guidance for how to do it and where staff layoffs are all but taboo because of vast national unemployment.
“What I’m trying to do,” says Parviz Aghili, “is to set up a bank that is accustomed with what is going on around the world.”
Iran has a heavily populated and complex banking sector, with several large state-owned banks that hold most of the country’s assets and deposits and at least 17 privately owned banks that tend to be smaller but more nimble and entrepreneurial. Euromoney profiles six institutions that represent different parts of the picture.
Can Dubai take advantage of Tehran’s rapprochement with the US to once again become Iran’s de facto financial link to the world?
As international sanctions on the country are loosened after the ground-breaking, albeit tentative, nuclear deal, Iran’s influence in the region will undergo dramatic changes, argues Emad Mostaque, of Noah Capital Markets.
The economic situation in Iran is likely to deteriorate further as the west steps up its sanctions against the regime, say analysts at the Institute of International Finance.
Iran’s overall ECR score fell by 2.6 points since Q1 2012 to 24.2 in Q3 2012, resulting in a four-place fall on ECR’s global rankings to 143.
TSE main investment focus; privatization continues to flow.