Deutsche Bank, Germany's largest bank by assets, says it will consider doing business in Iran only when sanctions disappear.
"Deutsche Bank will continue to adhere to all US and EU sanctions against Iran," it said in a statement. "The bank closely monitors the implementation of the nuclear agreement and related sanctions and will reconsider its position if sanctions are lifted in areas of relevance to the bank."
Reuters said international banks and most insurers are likely to steer clear of dealing with Iran for some time, fearing they could face more fines from US regulators despite this week's nuclear deal between world powers and Tehran.
Deutsche has yet to reach a settlement with US officials over suspicions that it may have breached sanctions in dealings with Iran. The bank has already paid about 9 billion euros ($9.8 billion) in US and European settlements and fines in the past three years, and faces more US penalties in the Iran case.
With almost 80 million people and annual output of some $400 billion, Iran will be the biggest economy to rejoin the global trading and financial system since Russia emerged from the ruins of the Soviet Union over two decades ago.
The report warned that while Iran is trying to come in from the cold, many of the sanctions imposed over its nuclear energy program are likely to stay for months, deterring international banks from business with the country until there are no risks of regulatory liabilities.
US and European banking restrictions, for example, will be lifted only when the International Atomic Energy Agency has verified that Iran is keeping to its side of the bargain.
British banks will also be cautious given past experiences, industry sources said. HSBC was fined $1.9 billion in 2012 by US regulators for violations, including doing business with Iran, while Standard Chartered paid $667 million in 2012 for violating US sanctions and a further $300 million after more compliance shortcomings were uncovered.
The Others
"Global banks are unlikely to rush in until the ground rules are clearly laid out by the US," an executive at a major bank based outside the United States.
Lenders further afield are also playing safe. "Some banks that can operate lawfully beyond the reach of the OFAC sanctions have chosen as a matter of bank policy not to engage in any Iran dealings ... The juice isn't worth the squeeze," said Les Carnegie, who specializes in international trade and national security matters at law firm Latham & Watkins.
Global transaction services organization SWIFT said on Tuesday current European Union sanctions remained in place which included "measures prohibiting companies such as SWIFT from providing specialized financial messaging services to EU-sanctioned Iranian banks."
First Steps
Still, parts of Britain's financial services industry, which includes the Lloyd's of London insurance market , will be vying for business in Iran.
Government department UK Export Finance, which provides banking and insurance guarantees to support British exporters, said on Thursday it would initiate "a review of Iran to assess creditworthiness, in light of the new agreement, and the expected positive effect on the Iranian economy."
However, it added that Iran had to clear arrears with UKEF "to a large degree" before full cover could be restored.
Nigel Kushner, a director with the British-Iranian Chamber of Commerce, said trade prospects would depend on Iran complying with a "multitude of obligations."
"The reality is that there will be no tangible change in the EU or US sanctions regime for at least six to nine months at best," said Kushner, a London-based sanctions lawyer.
Industry sources said that while some insurers were gearing up for a resumption of business, they were unlikely to make any moves yet.
Helen Dalziel, senior market services executive at the International Underwriting Association, said the British Treasury had issued a notice to insurers saying its previous guidance remained in place. "They're not recommending trade with Iran at present," she said. "Essentially, nothing's changed for our members and won't change for several months, we believe."
Insurer Allianz said it would adjust its business "if and when the steps specified in the political agreement have been implemented."
A similar message was given by CityUK, a trade association working to promote UK financial services overseas.
"Our focus will be on the need for a clear and consistent policy on sanctions and their operation," said Gary Campkin of CityUK.
