EDBI Relinks With 90 Foreign Lenders

Export Development Bank of Iran, the state-owned bank specializing in financing foreign trade, has managed to reestablish correspondent relations with 90 banks in 65 countries after the lifting of sanctions in January, according to Ali Salehabadi, the bank’s managing director.

 “An agreement with Eximbank of Korea, a three-month refinance line of credit with Switzerland’s BPC Bank for importing medicine, and collaboration with Italy’s Medio Banca over a $2 billion finance under the supervision of the Central Bank of Iran are among other measures taken by the EDBI to reboot banking relations with the outside world,” he was quoted as saying by Economy Ministry news service Shada.

EDBI has also expanded ties with Russian lenders, according to the banker.“Currently we have links with six Russian banks, allowing us to issue letters of credit in ruble and euro.”

“We have also allocated a €10 million credit line to Bank Melli Iran’s subsidiary in Russia, Mir Business Bank.”

EBDI has also signed a contract with Magnit, Russia’s largest retailer, to sell Iranian goods in Russia.

The Export Development Bank of Iran has zeroed in on developing trade with Russia, allocating a €20 million credit line to facilitate exports to the country.

Elaborating on the EBDI’s performance in implementing anti-money laundering policies, Salehabadi said: “EDBI has upheld all the measures announced by the Iran Financial Intelligence Unit (affiliated to the Economy Ministry), and is ranked as the top state-owned bank in implementing AML standards.”

 FSR Confirmed

Salehabadi also referred to his bank being rated by the Capital Intelligence, and said, “We have also plans to start cooperation with Fitch.”

Last week, Capital Intelligence Ratings announced that it has affirmed the Financial Strength Rating (FSR) of the Export Development Bank of Iran (EDBI) at ‘BB-’. The FSR is supported by the bank’s strong capital adequacy, its privileged access to low cost funding (due to its official policy role) and its well managed cost base.

Due to its special remit, and in light of the recent upgrade of Iran’s Sovereign Long-Term Foreign Currency Rating (FCR) to BB-/B/Stable (from B+/B/Stable), EDBI’s Support Rating was raised to ‘2’ from ‘4’, which indicates a very high likelihood of further foreign currency liquidity and capital support being made available by the authorities should the bank need it. EDBI’s Long- and Short-Term FCRs were affirmed at ‘BB-’ and ‘B’, respectively, with a ‘Stable’ outlook, and remain at the sovereign level.

The banker went on to elaborate on his bank’s lending performance, saying “EDBI is the only Iranian financial institution offering buyers credit. We allocated $566 million for this purpose during the previous Iranian fiscal year” that ended in March.

The bank’s total paid loans amounted to 57.8 trillion rials ($1.8 billion) during the previous year compared to 44.7 trillion rials ($1.4 billion) in the year before that.

“The agriculture, forestry and fishery sectors received about 9.2 trillion rials ($291 million) during the last financial year -- four times more than the year preceding it,” Salehabadi was quoted as saying.