Germany's Federal Financial Supervisory Authority has declared a compensation event for Bank Sepah-Iran's Frankfurt branch after determining that it can no longer repay customer deposits. The decision allows the Compensation Scheme of German Private Banks to assess and pay eligible depositor claims up to the statutory limit of EUR 100,000, with higher compensation available in certain exceptional cases. The Frankfurt Local Court has opened insolvency proceedings and appointed Lucas Flöther as insolvency administrator following BaFin's application on Sept. 4, 2026. European Union sanctions against Bank Sepah have cut the branch off from European payment systems. The nonsystemic branch had total assets of EUR 50.4 million at Dec. 31, 2025, and its insolvency does not threaten financial stability. The compensation scheme will contact the 11 remaining depositors, while the Association of German Banks' deposit protection fund may cover deposits above the statutory limit subject to its rules and applicable coverage limits.
2026-09-10BaFin
Germany's Federal Financial Supervisory Authority declares compensation event for Bank Sepah-Iran's Frankfurt branch
Germany's Federal Financial Supervisory Authority has declared a compensation event for Bank Sepah-Iran's Frankfurt branch, enabling eligible deposits to be reimbursed up to EUR 100,000 under the statutory scheme. Insolvency proceedings have opened, and the compensation scheme will contact the branch's 11 remaining depositors. BaFin said the nonsystemic branch's failure does not threaten financial stability.