The bank was established in London in 1973 in the name of Iran Overseas Investment Bank Limited (IOIB) as an authorised institution and was accordingly subject to the regulatory framework of the Bank of England. It was originally a consortium bank, which invested surplus Iranian oil monies in Western economies. At that time the share ownership was 50% Iranian, with the remaining 50% equally distributed between eight International banks.

As a consequence of the Iranian Islamic revolution in 1979, the Bank’s activities became somewhat curtailed as the syndicated loan market was no longer available to Iran, and in 1982 the eight non-Iranian International banks shareholders were bought out, hence IOIB was then owned solely by four Iranian banks, (Bank Saderat Iran, Bank of Industry & Mine, Bank Melli Iran and Bank Mellat) each holding 25% of the equity. This ownership structure remained in place until 2001.

In the mid ‘80’s the Bank developed into trade finance business, mainly with Iranian bank counter-parties. This business expanded considerably during the latter part of the 1980’s with the introduction of deferred payment letters of credit from the Iranian banking system, which contributed a major portion of the Bank’s business.

In the late 1990’s, the Bank of England and Bank Markazi Jomhouri Islami Iran (The Central Bank of Iran) came to the view that the presence of six Iranian banks in London (all effectively State owned and involved in similar trade finance activities) should be restructured. Subsequently in November 2001 Bank Saderat Iran, Tehran attained the 75% of the other three shareholders, and thereby acquired 100% control of IOIB. In March 2002 the name of the Bank was changed from IOIB to Bank Saderat PLC to reflect the new ownership.

Bank Saderat Iran, London branch had a long history in London, being the first Iranian bank to be established in the City in 1963, and the main purpose for Bank Saderat Iran taking over IOIB was to combine the undertaking of its own London branch with its newly acquired UK subsidiary in compliance with the discussions between Bank Markazi Jomhouri Islami Iran, and the FSA. The branch was profitable and its balance sheet footings was larger than IOIB. With effect from 1st July 2002 the assets and liabilities of the London Branch were integrated into Bank Saderat PLC with combined balance sheet footings of £940m approx.

Since the merger there has been a continuing improvement in the profitability of the bank, primarily achieved through increasing the Bank’s trade finance and commercial lending portfolios. The Bank continues to put the financing of Iranian trade, both imports and exports, at the heart of its corporate strategy, but has also increased its exposure in longer-term infrastructure projects within Iran. In order to assist in the funding of these projects and to ensure the Bank preserves a well-matched portfolio, Bank Saderat PLC raised funds by means of a three-year syndicated loan in the London market. The initial intention was to raise US$100m, but owing to over-subscription the amount was increased to US$120m. Bank Saderat PLC is proud that this syndication, the first by a UK incorporated, Iranian owned bank, since the Islamic Revolution, was such a success, with participants from Europe, the Far East and the Persian Gulf region.

The Bank is also preparing for the introduction of the new Capital Adequacy Directive, commonly known as Basel II. Under the new Basel regime the financing of Iranian trade will, in all likelihood, make greater demands on the capital allocation of the Bank. Bank Saderat PLC is sufficiently well capitalised to absorb the increased requirement and remain well above the minimum regulatory Risk Asset Ration set by the FSA.

Whilst Iran will remain the Bank’s core business it is the intention of the Board of Directors to diversify its asset base in line with the five year plan which was formulated at the time of the merger of Bank Saderat Iran, London branch and Iran Overseas Investment Bank PLC.