The two largest Iranian banks, Bank Saderat Iran and Bank Melli Iran (BMI), and Bahrain-based Ahli United Bank (AUB) have come together to form a joint venture bank headquartered in Bahrain called Future Bank.

Hamid Borhani, regional manager of Bank Saderat Iran in the UAE, told Gulf News the new bank will be capitalised at Dh367 million ($100 million) and each partner will subscribe to one-third of the capital.

All branches of Bank Saderat and Bank Melli in Bahrain, Oman and Qatar will be converted into Future Bank branches.

He said the new bank may apply for a licence to operate in the UAE in due course. However, there won't be any change in the UAE operations of Bank Saderat and Bank Melli Iran.

Bank Saderat, which has a domestic network of 3,300 branches and a 24 branches outside Iran, currently operates a branch in Oman and Qatar and two in Bahrain.

Bank Melli has a network of 3,250 branches including 25 outside Iran, and also operates two subsidiaries in Moscow and London.

A similar joint venture bank is being considered by three leading regional banks: Emirates Bank International, Qatar National Bank (QNB) and Bank of Beirut. They have joined to set up in Syria under the name Bank Beirut and Emirates. The capital of this bank will be $30 million, sources earlier told Gulf News.

The growth in Iran-UAE trade, currently estimated at over $3 billion, has helped Iranian banks boost their profitability in a big way.

The UAE operations of both banks did well last year, with Bank Saderat retaining the number three slot in earnings among the foreign banks in the UAE with a net profit of Dh220.443 million, up from Dh125.47 million in the previous year.

BMI meanwhile posted a net profit of Dh101.33 million during 2003 against Dh83.82 million the year before.

On the asset side, while Bank Saderat witnessed a moderate growth from Dh7.197 billion to Dh8.538 billion, BMI's assets grew 5.04 per cent from Dh3.26 billion to Dh3.43 billion.