German magazine “Wirtschaftswoche” reported that Germany’s financial watchdog, BaFin, has put Sapeh Bank’s branch in Frankfurt into bankruptcy proceedings,

The German magazine “Wirtschaftswoche” reported that Germany’s financial watchdog, BaFin, has initiated insolvency proceedings for the Sapeh Bank branch in Frankfurt because the branch no longer has the ability to repay its customers’ deposits.

According to the report, the Sapeh Bank branch, which has been operating in Frankfurt since 1978, held about €49 million in deposits with Germany’s central bank, the Bundesbank, at the end of 2024. However, the bank apparently could no longer access these resources due to restrictions resulting from international sanctions on the financial transfers of Iranian banks.

BaFin simultaneously activated the deposit compensation process so that eligible depositors can receive their claims from the Deposit Guarantee Fund.

Wirtschaftswoche wrote that BaFin had also previously supervised the Sapeh Bank branch and, in 2023, fined it for deficiencies and delays in submitting the reports related to risk-bearing capacity.

The magazine also reported that, following the continuation of the war in Iran, BaFin has increased its supervision of other Iranian banks in Germany, including the National Bank branch in Hamburg.