VTB Holds Plans for Iran Expansion Amid Rising Tensions

Russia's VTB Bank plans to expand into Iran but will delay operations due to escalating conflicts between Israel and Iran. Under Western sanctions, VTB opened a representative office in Iran and is awaiting a banking license. The situation's unpredictability adds difficulty to business relations despite a free trade deal.

Amid escalating tensions between Israel and Iran, Russia's second-largest bank, VTB, remains cautious about its plans to expand operations in Iran. The bank's CEO, Andrei Kostin, announced that VTB will delay the opening of its Iranian branch until hostilities cease.

VTB, affected by Western sanctions, initially set up a representative office in Iran in 2023 and has since applied for a local banking license. However, recent violence, including Israeli strikes on Iranian nuclear sites and retaliatory attacks, has complicated the timeline.

Despite current challenges, Kostin highlighted Iran's growing significance as a trading partner for Russia, supported by a new free trade agreement. However, currency regulations and geopolitical instability present substantial hurdles for business engagements in the region.

(With inputs from agencies.)