Wednesday, Feb 29, 2012

ABU DHABI (Zawya Dow Jones)--National Bank of Abu Dhabi, the emirate's largest bank by assets, said it is reducing banking activities with Iran amid mounting international sanctions against the country.

"We don't have very much business with Iran," Michael Tomalin, the bank's chief executive, said Wednesday on the sidelines of a conference in Abu Dhabi. "To the extent to which we do, we are reducing our activities with Iran in line with the directions we are following."

National Bank of Abu Dhabi has operations in the U.S., Tomalin noted, and was taking "a lot of care to abide by the rules and regulations" of the U.S.

However, he said U.S. regulators had not approached the bank to talk specifically about Iran.

The comments follow a Wall Street Journal report Wednesday that U.S. Treasury officials disrupted a Dubai-based financing channel for Iran late last year. The Journal said that Dubai's Noor Islamic Bank had been a primary conduit for returning foreign-currency oil receipts to Iran, until it agreed in December to halt dealings with Iranian entities that have been sanctioned by the U.S. and the European Union, including Iran's banks Saderat and Melli.

Noor Islamic Bank is the only bank in the United Arab Emirates that has been targeted by the U.S. for dealings with Iran, a U.A.E. government official said Wednesday. "As far as the U.A.E. is concerned, (Noor Islamic Bank) is the only institution," Khalid Al Ghaith, the U.A.E.'s assistant foreign minister for economic affairs, told reporters at the same conference.

Al Ghaith said U.A.E. officials are in touch with the U.S. on the Iran sanctions issue. "We are committed to international laws, but as far as the U.S. sanctions are concerned, they remain U.S. set sanctions on Iran, and we are in constant talks and discussions with them," Al Ghaith added.

The United Arab Emirates central bank has recently been limiting letters of credit issued by U.A.E. banks for Iranian businesses.

The U.S. and the European Union have stepped up sanctions against Iran over the past year in response to the country's nuclear program, which western powers believe is aimed at producing weapons but Tehran insists is for peaceful power generation.

-By Asa Fitch, Dow Jones Newswires, +971 55 1093359, asa.fitch@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

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29-02-12 0844GMT