Yerevan-based Mellat Bank CJSC, fully owned by Iran’s Bank Mellat, has increased its authorized capital in compliance with the new requirement of the central Bank of Armenia, Mohammad Bigdeli, chairman of Mellat Bank CJSC’s board, told a press conference.

The authorized capital was built up to 32.1 billion drams (about $67 million) in September and its normative capital now amounts to 31 billion drams (about $65 million), ArmBank.am reported.

To enhance effectiveness, firmness and stability of banks the Central Bank of Armenia announced a new requirement for banks – their capital must amount to no less than AMD 30 billion ($63 million) from January 1, 2017 instead of the present AMD 5 billion ($10.5 million).

Iran's Mellat Bank opened a subsidiary in Armenia in 1996 in accordance with the agreement signed with the Central Bank of Armenia. Initially the bank operated as Iranian Mellat Bank’s branch, but in September 1997 it was reorganized into a subsidiary with CJSC status.

Bigdeli  said that after the sanctions were lifted the bank decided to open branches in other countries to provide higher quality services to clients and tourists.

New Yerevan Hqs.

Mellat Bank opened its new office in Yerevan last week.

Deputy general manager of Mellat Bank Armenia, Gholamreza Mousavi, speaking at the opening ceremony, said that the office is in downtown Yerevan and expressed the hope that its modern design and comfort would help cater to clients’ needs.

He also expressed the hope that the bank could open more offices in Armenia.

He said that Mellat Bank is offering services to many clients from Iran and other countries, and this shows that tourism and economic activity in Armenia is growing.

Deputy Chairman of Armenia's central bank Vakhtang Abrahamyan, who was also speaking at the inaugural, said Mellat Bank has a high status in Armenia’s banking sector, providing high-quality services in line with mutual cooperation.

“We are happy to say that Mellat Bank meets all the requirements of the central bank, and this is a basis for its long-term activity,” he said.

Iranian ambassador to the Caucasus nation, Kazem Sajad, said that the Iranian side has met with Armenia's Central Bank Chairman Arthur Javadyan, representatives of the finance ministry and the state revenue committee "to develop cooperation in banking and insurance sectors."

He said that the number of Mellat's branches in Armenia is expected to increase and that the bank will strive to further improve its services.

Planning Tbilisi Branch

The bank is reportedly also considering opening a branch in Georgia, Bigdeli was quoted as saying.

The Tbilisi branch will operate under the management of the Yerevan branch.

Bigdeli said that the matter is under preliminary consideration. “If it is decided that opening this branch is viable, we will open it,” he said.

Ali Rastegar, Bank Mellat’s CEO, said on Monday that the UK High Court has ruled in favor of his bank and it will receive $4 billion in compensation by late spring.
Mellat had made a case against the UK Treasury for being sanctioned without sufficient evidence because of its involvement in the country's nuclear program. According to Rastegar, the favorable ruling is in its final stages, ILNA reported.
 Bank Mellat, Iran’s largest privately-owned bank, was hit with sanctions in 2010 as the EU and western countries targeted Iran’s nuclear program. The European Court of Justice has also ruled that the bank's assets should not have been frozen in 2010.
Bank Mellat had sued  the UK government for losses after it succeeded in 2014 in challenging a 2009 treasury order prohibiting that country's financial institutions from doing business with the Iranian lender — in effect shutting it out of the UK financial sector — because of its alleged links to Tehran’s nuclear program. In October a high court in the UK rejected the British government's attempts to dismiss Mellat's $4 billion damage claim against the UK Treasury for imposing "irrational" sanctions on the private lender.
Rastegar also said Shell oil company has paid $860 million of its debts to Bank Mellat. The major Iranian lender has plans to open an account for the National Iranian Oil Company in an unnamed European bank to facilitate the transfer of Royal Dutch Shell's $1.3 billion outstanding debt to the state-owned NIOC.