The bank said it had informed clients in Iran on July 20 that they would have to transfer to other institutions by September 14.
ADVERTISEMENT
It said tougher disclosure requirements introduced by the United Nations and the European Union, and moves by the German government to restrict credit guarantees, meant it was no longer worth continuing doing business with Iran.
The banks move, which was earlier reported in the Wall Street Journal, also comes after a vigorous lobbying campaign by the US Treasury, which has warned more than 40 banks across the world that it would follow a strict interpretation of US and United Nations restrictions on doing business with Tehran.
Deutsche Bank which said pulling out would have more or less zero impact on its business will also cease to seek any new ties with corporate clients in Iran and wind down activities until it no longer had any relationships in the country.
The end result will be the same [as for private clients], said a person close to the bank.
We are seeing more and more financial institutions re-evaluate their relationships with Iran and dramatically scale back or cut off that business altogether, a Treasury spokeswoman said on Tuesday.
The Treasurys campaign to persuade banks to impose such informal sanctions has outpaced the US diplomatic attempt to win support for formal multilateral measures against Iran, which is unlikely to result in another round of UN sanctions against the country before September.
The campaign began when the US prohibited two Iranian banks Sepah and Saderat from gaining access to the US financial system for dollar transactions through third-party banks.
Some diplomats and analysts say the Treasury is considering further such executive orders, on terrorism or proliferation grounds, against Irans Bank Melli and against Bank Markazi, the Iranian central bank.
In June, Hank Paulson, the Treasury secretary, hinted at possible grounds for such a move when he said: The central bank of Iran was sending money through Bank Saderat to Hizbollah.
A move against the Iranian central bank, which is closely involved with the receipt of hard-currency payments for oil, could have the effect of closing the entire Iranian economy from dollar transactions. Iran has already announced it is shifting reserves into other currencies.
But the US Treasury said yesterday that it did not speculate on action it might take, and observers caution that it needs to observe due process before an executive order can be issued.
In the meantime, Mr Paulson has argued that Irans use of front companies makes it difficult for any bank to be sure that it was not violating international or US rules on proscribed Iranian institutions.
On Tuesday, Germanys Commerzbank said it was also debating pulling out of Iran. A spokesman for the bank said: We are in a process to find out what business, if any, we can do [there] in the future.