Two Iranian Banks Opening Munich Branch

Two Iranian private banks are to open branches in Munich, the capital of the German state of Bavaria, which will greatly enhance the prospect of Iran-German financial interactions, the deputy economy minister for economic affairs and media, energy and technology announced.

“Some Iranian lenders have filed applications to open branches in Bavaria a year and a half ago and after conducting the necessary assessment, we approved the requests of Middle East Bank and Sina Bank,” Markus Wittmann also said in response to a question by Financial Tribune at a news conference on Monday.    

According to Wittmann, Middle East Bank will officially receive its operation license this summer and Sina is expected to get it either this year or early next year.

The southern state of Bavaria is Germany’s biggest state, hosting many industries, including BMW, Audi and Siemens.

Earlier in his speech to an Iran-Bavaria business gathering hosted by Tehran Chamber of Commerce, Industries, Mines and Agriculture, Wittmann referred to persisting banking difficulties preventing the two countries from realizing their full business potential.                        

“The Germans are known to get things done fast, but we only do so when the road in front of us is clear,” he said. “When it comes to financing problems, we will try and change the status quo.”

He added that at present, 50 projects are at the operational stage, most of which concern the manufacturing sector.

The visit by the Bavarian delegation to Tehran is the latest in a series of bilateral talks between Iran and Germany. Bavaria has been particularly proactive in opening up to Iran even before the sanctions were formally lifted in January 2016.

Last year, Tehran Chamber of Commerce opened a representative office in Munich at the Bavarian Industry Association (vbw).  

On Monday, the German side reciprocated by opening a similar office at Tehran’s chamber of commerce.

According to Katja Schlendorf-Elsasser, a spokeswoman fort the Bavarian Industry Association, vbw has a representative office in the Industrial Development & Renovation Organization of Iran, one of the country’s biggest conglomerates.

 Win–Win Approach

Bahamn Eshqi, TCCIM’s secretary-general, hoped that Iran-Germany interactions would lead to more bilateral business, including a boost for Iranian exports to Bavaria and a sharing of knowledge in areas such as industries, renewables, medical science and technological knowledge-sharing.   

According to Eshqi, Iran-Germany annual trade volume stood at €2.4 billion during 2013-15. However, between January and November 2016, Bavarian exports to Iran rose by 33%. “Iranian merchants are ready to speed up their economic relations with EU countries in the shortest time possible,” he said.

Eshqi added that Bavarian firms can invest in a multitude of sectors, including the oil and gas sector for meeting their energy needs, water management, food industry and construction market.

In response to Iranian complaints about difficulties in visa issuance, German authorities pledged to help resolve the issue, with Wittmann promising that no such problem “would exist next year”.

In an opening speech to the event, Bertram Brossardt, the head of vbw, also addressed the lack of effective banking channels between Iran and Germany, tracing it to the decade-old isolation of Iranian banks during the sanctions.

“We hope to change the situation gradually as we move forward and we are setting the stage for that,” Brossardt said.

“The thing is that Germans have a knack for long-term ties and we are building the needed trust for things to go along smoothly–something that the German government fully supports.”

The German delegation insisted that they are  not in Iran to merely “sell” their products but rather to boost manufacturing, increase imports from Iran and share know-how on a host of issues.