Economy, Business And Markets

Asian Banks Better Placed Post Sanctions

Asian Banks Better Placed Post SanctionsAsian Banks Better Placed Post Sanctions

Asian banks are expected to be among the first institutions to venture into Iran once sanctions are eased, with western financial players remaining cautious for now, banking officials said on Thursday.

Iran and world powers reached a deal in July over Tehran’s nuclear program in exchange for sanctions relief, which is expected to come into effect in January, pending Tehran fulfilling its obligations outlined in the deal aka the JCPOA, Reuters reported.

“We will see the Asian banks going back in,” said Justine Walker, of the British Bankers’ Association (BBA) lobby group, without giving further details.

Amr Aboushaban, of emerging markets investment bank Renaissance Capital, said western banks would tread carefully, having experienced multiple fines in recent years for sanctions violations.

He said that smaller players and Asian banks are most likely to lead the return to the Iranian finance sector.

“The Persian Gulf banks -- a couple of countries -- will be doing, especially, short-term lending (in Iran),” he added.

Iran is struggling with capital constraints after years of financial freezes. So far, no banks have publicly announced plans to return to Iran.