Two of Britain’s largest banks, Santander UK (GB:SAN) and Lloyds Banking Group (GB:LLOY), have been duped by Iran to avoid sanctions and move money globally. As per a Financial Times report, Iran used shell company accounts in these banks to evade U.S. sanctions imposed in November 2018.
The news comes at a time when the UK has joined the U.S. in launching airstrikes against the Iranian-backed Houthis in Yemen that have been attacking ships in the Red Sea.
Iran Evades Sanctions via UK Banking Giants
The shell companies are supposedly owned by Iran’s sanctioned state-controlled Petrochemical Commercial Company (PCC), which has been accused of generating millions of dollars for Iran’s Islamic Revolutionary Guard Corps elite Quds force. Moreover, PCC and its British subsidiary, PCC UK, are alleged to be cooperating with Russia to fund Iranian proxy militias. The sanction evasion scheme is said to be backed by Tehran’s intelligence services.
As per documents, emails, and records seen by Financial Times’ reporters, the PCC has been operating out of an office in Belgravia formed by a complex web of front entities in the UK and other countries, including China. Front entities are organizations that are created to conceal the true identity of the controlling group or an individual.
Earlier too, British banks that failed to comply with U.S. sanctions were slammed with huge fines. Santander and Lloyds have yet to publicly accept or reject the report’s claims. Even so, any chances of sanction evasion could be widely seen as a regulatory lapse by the banks.
Let’s have a look at how analysts rate these two UK banking giants.
Is SAN Stock a Good Buy?
Santander UK Plc is a British financial company owned by Spain’s Santander Group. SAN offers a range of banking products and services to personal, business, and public sector customers. SAN shares have gained over 8% in the past year.
Is Lloyds a Good Share to Buy Now?
FTSE 100-listed Lloyds Banking Group is one of the oldest and largest banks in the UK, offering a wide variety of services. It operates through retail, commercial banking, and insurance and wealth units. LLOY shares have lost over 19% in the past year.
With five Buys, three Holds, and one Sell rating, LLOY stock has a Moderate Buy consensus rating on TipRanks. The Lloyds Banking Group plc share price target of 57.71p implies 36.4% upside potential from current levels.
