Many big European banks haunted by US fines forgo Iran-related deals

Washington

EUROPEAN companies flocking back to Iran are doing so without their favoured lenders at their side.

Less than two years after BNP Paribas agreed to pay a record US$9 billion US fine in part for dealings with Iran, many of the continent's biggest banks remain unwilling to go anywhere near Iran-related business for fear that they will run afoul of remaining US sanctions on the country. That's opened the way for Chinese and Persian Gulf lenders, as well as European institutions such as Belgium's KBC Groep, to grab a slice of the business of funding companies' investments in Iran.

The reluctance adds a complication for manufacturers from Airbus Group to PSA Group, the maker of Peugeot cars, as they seek to capitalise on growth in Iran. The funding issue has become a financial diplomacy hotspot. In France, the government, worried that companies may lose exports, has started talks with the US Treasury's Office of Foreign Assets Control (OFAC) to get a commi…