Bank Mellat received compensation it had demanded on the UK after the lender won a court case against the UK Treasury in June.
In a letter to the Securities and Exchange Organization, the lender said it has received the “the amount agreed” with the UK Treasury after winning a court case related to a UK ban on activities of the bank in 2009.
Bank Mellat is 80% privately owned, with the government in Tehran holding a 20% stake.
On June 18, London made a last minute deal to settle a £1.3 billion ($1.6 billion) damage claim by the bank.
Mellat’s lawsuit had initially claimed $4 billion (£3.2 billion) from the treasury, but that figure was later reduced to $1.6 billion plus interest.
The letter, seen by Financial Tribune, doesn’t provide details about the exact figure the UK government paid to the lender.
In a meeting with shareholders, however, the deputy for financial affairs of Bank Mellat, Kazem Chavoshi, said Tuesday the bank finally received €80 million in compensation, according to Donyaye Bourse website.
Shedding light on how the money is supposed to be transferred to Iran due to banking restrictions imposed by the United States, the CEO of the bank, Mohammad Bigdeli, said earlier the manner of transfer had been clarified in the settlement deal with the UK government. He also dismissed reports about the possibility of bartering damage claims with goods.
In 2009, the UK government alleged that the Tehran-based bank was involved in financing firms involved in Iran’s nuclear program – allegations that the bank denies – and imposed sanctions on Bank Mellat.
The settlement comes six years after the UK supreme court ruled that the sanctions were unlawful and the government’s response had been “arbitrary and irrational” and “disproportionate”.
Bank Mellat argued that the 2009 sanctions substantially damaged its reputation and goodwill both in the UK and internationally and caused significant pecuniary loss.
Impact on Stock Market
The bank’s letter was published on Codal website - an information website created for instant official publication of corporate data - in the run-up to reopening of Bank Mellat symbol in the stock market after it was frozen in June.
As per the letter, the agreed sum will increase the bank’s profit in the current fiscal year (March 2019-20) up to 7.8 trillion rials ($68.4 million) based on the parity rate of 75,000 rials/USD.
The amount will be recorded in the financial report of the bank as “unexpected and non-operating income”, which is expected to boost the bank’s earnings per share (EPS) to 130 rials in the current fiscal year.
EPS is the portion of a company's profit that is allocated to each outstanding share of common stock, serving as an indicator of the company's financial health.EPS shows how much money a company makes for each share of its stock.
Reopening of symbol ticker of the bank on Wednesday was well-braced by the investors waiting for more than 100 days.
The value of purchased shares of the bank reached 1.3 trillion rials soon after the symbol ticker appeared on stock market bulletin with another 1 trillion rials worth of order being on the waiting list.
Bank Mellat was branded as “the phoenix” of the Tehran Stock Exchange on Wednesday as it alone added more than 2,500 points to the benchmark, after it fell 4,500 points in the early hours of trading session.
Gaining 20.54 points, or 0.01%, the main gauge of TSE ended flat on Wednesday thanks to the strong support of Bank Mellat.
