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© Reuters. FILE PHOTO: A girl seems to be at her cellphone as she walks previous a department of Lloyds financial institution in London, Britain, July 20, 2018. REUTERS/Toby Melville/File Photo
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By Jesús Aguado and Iain Withers
MADRID/LONDON (Reuters) -Santander and Lloyds (LON:) shares fell after the Financial Times (FT) newspaper reported that Iran used accounts held on the banks within the UK to covertly transfer cash around the globe in a sanctions-evasion scheme backed by Iran’s intelligence providers.
Lloyds and Santander (BME:) UK supplied accounts to British entrance corporations secretly owned by a sanctioned Iranian petrochemicals firm primarily based in London, the FT reported citing paperwork the newspaper had obtained.
Shares in Madrid-based dad or mum Santander fell as a lot as 6.1% and have been down 4% at 1328 GMT, whereas shares in Lloyds declined 0.7%. Santander shares rose greater than 6% final week following 2023 earnings that beat forecasts.
“The market must be realising that they may be fined,” mentioned Nuria Alvarez, an analyst at Madrid-based dealer Renta 4.
On Monday a Santander spokesperson mentioned that the financial institution was not in breach of U.S. sanctions primarily based by itself investigation.
“We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and U.S. authorities,” the spokesperson mentioned.
A Lloyds spokesperson mentioned the group sought to make sure compliance with sanctions legal guidelines and was dedicated to adhering to financial crime legal guidelines and rules, including it couldn’t touch upon particular person prospects.
European lenders, resembling Unicredit (BIT:) and Standard Chartered (OTC:), have been hit with giant penalties over Iran sanctions prior to now, with the Italian lender paying $1.3 billion to U.S. authorities to settle probes.
Standard Chartered agreed to pay $1.1 billion in 2019 to U.S. and British authorities over monetary transactions that violated sanctions in opposition to Iran and different nations.
According to the FT, the Iranian state-controlled Petrochemical Commercial Company was a part of a community that the US accuses of elevating tons of of hundreds of thousands of {dollars} for the Iranian Revolutionary Guards Quds Force and of working with Russian intelligence companies.
Both PCC and its British subsidiary PCC UK have been below US sanctions since November 2018, the FT mentioned.
One of its alleged entrance corporations, referred to as Pisco UK, is registered to a indifferent home in Surrey and used a enterprise account with Santander UK, the FT report mentioned.
An individual with data of the scenario mentioned that Santander has closed Pisco’s account.
Santander declined to touch upon particular consumer relationships.
“Where we identify sanctions risks, we will investigate and take appropriate action,” the spokesperson mentioned.