Oberbank Deal to Trigger European Finance Flow

The chief executive of Oberbank–whose bank this week became the first major European bank to clinch a finance agreement with Iranian lenders–said the landmark deal can act as catalyst for similar contracts by Europeans to open their way into the Middle Eastern country.

“Iran’s economy is not only very attractive to Austria and Europe, but also to the whole world, because Iran boasts a young population and therefore many huge opportunities exist and thus win-win scenarios must be created for Iran and international companies,” Franz Gasselsberger also told IRNA.

Speaking on the sidelines of the signing ceremony for the €1 billion ($1.2 billion) finance deal clinched between Iran and his bank, the Oberbank CEO noted that the political aspect of things should also be taken into consideration when thinking of such deals.

The deal with Oberbank, which is the seventh-biggest bank of Austria with about €20 billion ($24 billion) in assets, was signed with 14 Iranian banks. Soon afterwards, another €500 million contract was inked between Denmark’s Danske Bank and 10 Iranian lenders.

Emphasizing that the Oberbank agreement was the first foreign finance deal between a European bank and Iran after the 2015  nuclear accord brought sanctions relief, Gasselsberger said, “It is truly a big day in Iran-Austria relations.”

The banker noted that while it took many months of negotiations for both sides to reach the agreement, the final result was mutually beneficial as the deal makes it possible for Austrian companies to venture into Iran in the health, infrastructure and other sectors.

 “If we look back at this day in the future, we will see that it started the further deepening of ties between the two nations,” he said.

In his speech at the signing ceremony, Gasselsberger also pointed to Iran’s young population and its significant economic and geographic positions in the Middle East, saying maintaining ties with Iran is of importance to the Central European country.

“Relations between Iran and Austria have a long history and we value the high trustworthiness of Iranian tradesmen more than anything else,” he said, adding that Oberbank strived to maintain its ties with Iranian traders as much as possible even when international sanctions were in full force.

As the chief executive outlined, since sanctions were eased after the implementation of the nuclear accord in January 2016, more than a thousand Austrian companies have expressed willingness to work with Iran.

He stressed the significance of Iran as a partner while hoping the finance deal would bode well for the Iranian economic growth and a propeller for Austrian foreign trade.

As Gasselsberger had previously announced, the Oesterreichische Kontrollbank, which is the main Austrian body that issues export credit guarantees, will be the entity providing guarantees and covering 99% of the projects included in the agreement.  

At the signing ceremony for the foreign finance deal, Iran’s ambassador to Austria also delivered a speech, saying the deal comes at an important juncture in developing economic ties between the two countries.

“There is no doubt that words like dialogue, respect, trust and collaboration have been keywords in longstanding Iran-Austria ties that go back centuries,” Ebadollah Molaei added.

The ambassador referred to the finance deal as another high point in relations between the two countries and their companies and businessmen, expressing confidence that it would jumpstart another promising phase in mutual ties.