Russia's VTB Bank has announced plans to open its first branch in Iran in the coming year, marking a significant development in financial cooperation between the two countries, an official with the bank told a meeting with Tehran Chamber of Commerce (TCCIMA) members on April 21.

Andrei Konstantin, VTB Bank's project manager, revealed the expansion plans while describing VTB as Russia's second-largest bank with assets of $439bn, 1,600 branches across Russia, and approximately 24mn customers. The bank is also noted as Russia's largest in terms of international network coverage.

Iran and Russia have dramatically accelerated their banking integration efforts since Russia faced Western sanctions following the Ukraine war, creating a partnership born from mutual isolation from global financial systems. The relationship gained significant momentum in January 2025 when the central banks signed a joint action plan to facilitate bilateral trade in national currencies, integrate domestic financial messaging systems, and connect card payment networks, as announced by Mohammad Reza Farzin, Governor of the Iranian Central Bank.

This cooperation culminated in November 2024 with the official connection of their interbank networks, enabling Iranian banking cards to function across Russia's ATM network, effectively creating a cross-border financial ecosystem independent of Western oversight.

The groundwork for this financial alliance began in 2023 when both central banks established initial banking ties to compensate for their disconnection from SWIFT and other international interbank messaging systems. Russian President Vladimir Putin reinforced this trajectory in September with his statement about enhanced bilateral relations with Iran under Supreme Leader Ali Khamenei's support, pointing toward a formal strategic partnership agreement.

VTB Bank also opened a representative office in Iran back in 2023, becoming the first direct Russian bank operating in Iran. This move follows about three years of groundwork to establish the bank's presence in Iran, said Mohammad Reza Rajaei, VTB Bank's official representative in Iran.

"Russia is one of the world's largest economies with trade volume reaching $700 to 800bn. However, Iran's trade with Russia stands at approximately $3bn, indicating Iran has not secured an appropriate position in Russia's economic relations," he said.

Rajaei added that VTB Bank, Russia's second-largest bank with assets valued at $260bn, has established correspondent relationships with 12 Iranian banks to deliver services through local financial institutions. He clarified that Iranian traders would maintain entirely rial-based relationships with Iranian banks, avoiding direct involvement in foreign currency transfers.

Ferial Mostofi, head of the Money and Capital Market Commission, highlighted the urgent need to resolve financial transfer problems for traders, noting: "VTB Bank of Russia has recently begun cooperation with Iranian banks and established a representative office in Iran. This collaboration has created facilities for Iranian economic activists, apparently beginning with the opening of an LC."

"Access to these services after years of isolation from the international banking network will increase transparency and reduce business risk for traders," she added.

Representatives from Iranian banks outlined specific services they could offer in partnership with VTB. Samad Ahangar, international deputy at Bank Saderat Iran, stated that both Iranian businesspeople operating in Russia and Russian citizens active in Iran could obtain bank guarantees by approaching VTB and Bank Saderat Iran.

Tania Yaghmaei, international deputy at Middle East Bank, revealed that the Central Bank of Iran would soon provide funds to agent banks for cooperation with VTB Bank. "Middle East Bank can assist with opening LCs for economic operators after the central bank approves currency allocation. This inter-banking cooperation between Iran and Russia represents a return to global banking operations," she said.