The German state of Bavaria has authorized three Iranian lenders to open branches in Munich, announced its State Minister of Economic Affairs and Media Ilse Aigner at a press conference in Tehran on Monday.
Aigner said Parsian Bank, Middle East Bank and Sina Bank will open branches in the capital and largest city of the state by August 2017.
"We have also repeatedly instructed our own banks to work with Iran and there has been constant progress on this issue ever since the lifting of sanctions [in January]," she said.
Ilse Aigner, who is leading a large delegation to Iran, said senior bankers were accompanying her on this trip to sort out banking hurdles that have proved to be the most challenging issue in the way of trade with Iran.
Slapped with billions of dollars in fines for violating US sanctions on Iran during the embargo, major European banks are still hesitant to work with Iran.
The Hamburg-based EIH bank, affiliated with Iran's Bank of Industry and Mine, is currently handling most of the transactions between Iran and Germany. Other Iranian banks are also making efforts to either reopen branches in Europe or gain a foothold now that nearly all the previous sanctions against Iran have been lifted.
Under the nuclear sanctions, Iranian companies transferred funds through money changers to conduct trade, which was expensive, time-consuming and sometimes unreliable.
In a meeting with Masoud Khansari, the head of Tehran Chamber of Commerce, Industries and Mines, the two sides hoped that trade between Iran and Germany would increase dramatically from the low point of $4 billion during the sanctions years.
"There has already been a 25% spike in trade between Iran and Germany since the lifting of sanctions and that is expected to reach $10 billion in future," he said.
Khansari admitted that banking obstacles constitute the biggest hurdle in the way of trade between the two countries. He urged German authorities to offset the pressures exerted by the United States on European banks.
Referring to the clearance of Hermes cover debt (worth $500 million), Khansari noted that Iran should not only be regarded as an 80 million-strong market since it is located in a region that is home to some 400 million people.
In a business forum held in Tehran's Espinas Hotel on Monday, private businesses from Iran and Germany held B2B meetings to explore a kaleidoscope of opportunities ranging from energy and engineering services to healthcare and construction material.
Mohammad Reza Najafimanesh, the head of TCCIMA's Commission of Ease of Doing Business, said on the sidelines of the event that such gatherings have been particularly helpful in building bridges between the businessmen of the two countries.
"This trip by Germans is in response to our earlier visit to the state of Bavaria and so far good agreements have been reached," he said.
As for banking relations, Najafimanesh told Financial Tribune there has already been some progress on that front.
"Following the efforts of the Central Bank of Iran and the Foreign Ministry, some openings have emerged and this progress is gathering pace," he said.
CBI's Green Light
Announcing that the Central Bank of Iran is focused on expanding correspondent banking relations with other countries, CBI's Deputy Governor Akbar Komijani confirmed on Sunday that it had given the thumbs-up to the operation of two Iranian banks in Germany.
Komijani, who was speaking at a meeting with Ilse Aigner, also pointed to the Hermes cover debt.
"All debts pertaining to the sanctions era have been repaid and with the full supervision of CBI, all banks are paying their dues on time," he said.
The CBI official also said Iran has enhanced ties with EIH (Europaisch-Iranische Handelsbank) while the branches of Bank Melli Iran and Bank Sepah are currently active in Germany and connected to the Target 2 system.
Aigner described relations between Iran and Germany as positive and improving.
"Fortunately, we are witnessing progress in business and banking deals with Iran and that Bayern International [Bavarian Bureau for International Business Relations] has currently opened an office in Tehran," she said.
"What is more, major companies such as Siemens and small- and medium-sized ones are keen on operating in Iran."
Maziar Motamedi has contributed to this report.
