By Faisal Abu Bakr | 2025-05-19

ADEN -- Recent US sanctions against Yemen's largest commercial bank underscore how the Houthis have exploited financial institutions in territories under their control to access global banking networks.

Economists warn that banks operating in northern Yemen risk similar penalties.

The International Bank of Yemen (IBY) was sanctioned for providing the Houthis access to international financial networks, the US Treasury said April 17.

This was done through the bank’s Society for Worldwide Interbank Financial Telecommunications (SWIFT) services that enable global transactions, it said.

IBY has helped Houthi-affiliated entities purchase oil, evade sanctions and seize assets from opponents, the Treasury said.

The bank has refused to relocate its headquarters from Houthi-controlled Sanaa to Aden, despite efforts by Yemen's Central Bank to distance financial institutions from Houthi influence, according to the Treasury.

The sanctions also target senior IBY officials: board chairman Kamal Hussain Al Jebry, executive general manager Ahmed Thabit Noman al-Absi and deputy general manager Abdulkader Ali Bazara.

"Financial institutions like IBY are critical to the Houthis' efforts to access the international financial system and threaten both the region and international commerce," Deputy Treasury Secretary Michael Faulkender said.

The action follows previous sanctions targeting other Yemeni financial institutions to disrupt the Houthis' ability to finance their destabilizing activities, including attacks on Red Sea shipping, the Treasury said.

Clear message to banks

The Houthis's actions have saddled many commercial banks with sanctions, economist Faris al-Najjar told Al-Fassel.

The Iranian regime-backed group pressured bank leadership to execute suspicious transactions via individuals, entities and companies affiliated with them, he said.

The sanctions send a clear message to other banks to stop serving the Houthis and transfer their operations to the Central Bank in Aden to protect themselves, al-Najjar said.

"The Houthis imposed laws that restrict the operations of banks, such as banning interest-based transactions, imposing extortionate levies on these banks, and facilitating suspicious deals through them," he said.

All these actions led to US sanctions, he said.

IBY was "the largest Yemeni commercial bank conducting the most extensive banking operations for Yemenis and traders inside and outside Yemen," Studies and Economic Media Center head Mustafa Nasr told Al-Fassel.

The bank invested heavily in treasury bills with the Central Bank in Sanaa and couldn't access those funds when depositors needed them, alongside many irregularities that left it struggling, he said.

Sanctions have further paralyzed its activities, he added.

The censure serves as "a warning to other banks that they will face IBY's fate, which undermines the Houthis' influence, authority and activities," Nasr noted.