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 Mohammad Reza Hosseinzadeh, chief executive of Iran’s biggest bank
The chief executive of Bank Melli Iran says he remains optimistic about establishing ties with top-tier European banks
Economy, Business And Markets

Interview: Bank Melli Iran Upbeat on Int’l Expansion

Iranian banks remain devoid of ties with major European counterparts who understandably err on the side of caution for fear of having to pay millions of dollars courtesy of potential US retribution, but the man helming the biggest Iranian bank anticipates a brighter future even as uncertainties abound.
"Personally, I remain very hopeful," Mohammad Reza Hosseinzadeh, chief executive of Bank Melli Iran, told Financial Tribune on whether he sees any top-tier financial institutions working with Iran in the next couple of years.
"Because so far, banks that have worked with us have been reassured that Iranian banks have an enhanced commitment toward international regulations," he added in an exclusive interview at the bank's central headquarters in Tehran.
Hosseinzadeh, 53, who commenced his career at the bank close to three decades ago and steadily rose through the ranks, says a ripple effect of enhanced reputation along with unremitting improvement on the part of Iranian banks will eventually tip the scales of the current challenges facing major international lenders toward profitability by working with Iran.
"I believe that the European Union has made its decision to work with Iran," he said, noting that its member states see their collective interests in preserving the nuclear accord, which is a positive sign, even if US President Donald Trump has chosen to decertify the deal and pass it on to congress.
On the other hand, the BMI chief said his bank is functioning on par with international standards ranging from compliance to governance.
As evidence, he cites the fact that as recently as mid-September, the Hong Kong branch of Melli Bank London PLC, which is a subsidiary of BMI, officially resumed its operations after obtaining the go-ahead from the Hong Kong Monetary Authority–the autonomous territory's fastidious currency board and de facto central bank.
The banker noted that BMI has managed to establish correspondent banking relations with 135 banks of 30 countries, half of them European. What is more, Bank Melli PLC and BMI branches in Hamburg and Paris have connected to TARGET 2, Eurozone's real-time transfer system.

Foreign Branches
Hosseinzadeh elaborated on the foreign presence of Bank Melli and began close to home.
"We have about half a dozen branches around the Persian Gulf, including a few in the UAE—with two in Dubai, one in Abu Dhabi, one in Sharjah and another in Al Ain," he said, adding that Muscat is home to BMI's only branch in Oman.
According to the banker, all the aforementioned branches, especially the Muscat branch, are now active and have clinched correspondent relations with a number of banks in the region, but the ice has yet to thaw where other banks are concerned.
Qatar is one of the few neighboring countries where Iranian lenders have yet to gain a foothold.
Hosseinzadeh said negotiations are well underway with "one of the biggest banks" of the Persian Gulf state for BMI to establish a branch there, but refused to name the bank.
Iran-Pakistan banking and trade relations have also not fared as well as expected after the nuclear accord, but the chief executive said that following the agreement on Banking and Payment Arrangement signed between the State Bank of Pakistan and the Central Bank of Iran in mid-April, BMI will be on course to open a branch in Karachi, most likely during the next fiscal year (starting March 21, 2018).
In Turkey, BMI has been designated as the Iranian agent bank in a bilateral national currency swap agreement finalized less than two weeks ago and has currently established correspondent ties with the nation's Ziraat Bank.
In addition to several Iraq branches, Bank Melli is present in various European hubs, namely Germany, France and Britain.

Fintechs and Money Transfer
Few disagree, even among big lenders' c-suites, that banks must evolve and join forces with fintechs and startups that are rapidly altering the world of finance.
Hosseinzadeh is no different and declares that his bank has been attracting young talent with the ultimate aim of supporting innovation and offering better user experience.
They will be part of the bank's Innovation Center, which is planned to open in the foreseeable future.
"We will operate our own fintechs, but that is not our only approach as we are also considering a number of fintechs in the form of partnership," he said.
In conclusion, Hosseinzadeh confirmed that money transfer to and from foreign destinations is possible for Iranian nationals through BMI.
"In fact, Bank Melli encourages people to stop using the services offered by moneychangers in this regard," he said.

 

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