Austria's Oberbank withdraws from Iran

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© Reuters. Austria's Oberbank withdraws from Iran© Reuters. Austria’s Oberbank withdraws from Iran

VIENNA (Reuters) – Austria’s Oberbank (VI:) will withdraw from Iran because of increased risk for European companies in light of potential U.S. sanctions, it said on Wednesday.

Oberbank signed a deal with Iran in September, enabling it to finance new ventures there. It was one of the first European banks to do so since Tehran struck a nuclear deal with six major powers in 2015 and many sanctions were lifted.

However, the outlook has changed after U.S. President Donald Trump pulled the United States out of the pact last month and said he would reimpose sanctions.

Although the European Union signatories have said they want to keep the deal in place, many companies have voiced their concern over the increased risk of conducting business in Iran.

“Oberbank has supported numerous clients and their Iran business in the past two years,” Oberbank said on its website. “The threat posed to European companies by U.S. secondary sanctions is forcing us to retreat.”

The lender had already taken the precautionary measure of placing its Iranian financing projects on hold. It now says that transactions and letters of credit related to Iran will be provided exclusively for contracts signed before May 8.

The bank said it advises its customers to conclude Iran-related transactions promptly and that payments are likely to be impossible from Nov. 4.

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