Iran’s Sina Financial and Investment Holding Co, which manages about US$7bil of assets, is seeking European investors to create a new investment bank after sanctions related to the nuclear programme were lifted, opening up the economy to foreigners.

The group is in talks with banks in Germany, Austria, Switzerland and the United Kingdom to take as much as a 25% stake in the new venture, which would initially be based in Tehran and could open European branches in two to three years, according to chief executive officer Behzad Golkar.

“There are many projects in Iran that need investment,” Golkar said in a telephone interview from Tehran. “If we had international investors, it would help us attract more foreign investment.” Sina held talks with Oman’s Bank Muscat SAOG, Golkar said, declining to name any other potential investors.

Iran, holder of the world’s fourth largest oil and second biggest natural gas reserves, is opening to foreign investors after the lifting of international sanctions earlier this year ended a decade of isolation. With a population of 80 million, the country is expanding its energy, technology, mining and banking sectors. The removal of sanctions may trigger at least US$50bil a year in foreign investment, according to the country’s central bank.

The new bank would have an initial paid-up capital of about US$100mil with a target to grow this to US$500mil in five years, Golkar said. Sina Financial may sell shares in the bank to the public and list on the Tehran Stock Exchange, he said.

Sina Financial, with interests spanning insurance, leasing and brokerage, also planned to start a fixed-income and equity fund, each with a value of 50 million euros (US$56mil), Golkar said. The company planned to raise money for the two funds from mainly European institutional investors, he said.

Source » Bloomberg