Iran sells 6 pct stake in state bank - official

* Third bank part-privatisation since February

* Shares sold three days before presidential election

TEHRAN, June 9 - Iran floated 6 percent of one of its largest state banks for about $105 million on Tuesday, a Tehran Stock Exchange official said, in its third part-privatisation of a bank in less than four months.

The sale of a stake in Bank Saderat, which was also reported by Iranian news agencies, came three days before a presidential election in which pro-reform rivals of conservative President Mahmoud Ahmadinejad are challenging his economic record.

Ahmadinejad's government is seeking to speed up the sale of state assets, but economists say U.N. and U.S. sanctions over Tehran's disputed nuclear programme as well as a slowing economy are complicating efforts to find buyers.

With foreign investors wary of Iran because of its nuclear row with the West, some analysts say firms to be sold off may simply end up being transferred within the Islamic Republic's vast public sector.

The stock exchange official, who declined to be named, said more than one billion shares were sold at a price of 1,001 rials (just over 10 U.S. cents) each.

He said the price was set low in an apparent attempt to make the offering attractive for buyers and ensure the success of the flotation. He said he did not yet know who bought the shares.

The Tehran Stock Exchange plunged about 40 percent in value between August 2008 and March 2009, in line with tumbling oil prices and declining share markets elsewhere in the world. Since then, however, it has recovered by more than 10 percent.

Iran is the world's fifth-largest oil exporter.

"All of the 6 percent has been sold," the official said.

FAST SALE

The shares were sold in six minutes, the head of Iran's Privatization Organization said.

"This is under conditions when in some countries the sale of 5 percent of a bank's shares would take a year," Gholamreza Heidari Kord-Zangeneh was quoted as saying by the ISNA news agency, referring to the global economic slump.

Since February, Iran has sold similar stakes in two other state banks - Bank Mellat and Bank Tejarat.

Iran's economy is dominated by the state but the government has been seeking to privatise government-owned firms after the constitution was changed to encourage the sale of such assets.

In Friday's election, moderate politicians advocating better ties with the West are seeking to deny Ahmadinejad a second four-year term.

They blame the government for double-digit inflation and unemployment. The conservative president says the Iranian economy is still showing solid growth and is doing much better than those in the West.

Analysts say foreign investors will closely watch the election for any sign that it could lead to an improvement in ties with western capitals, which deteriorated under Ahmadinejad.

"Even the indication of movement towards this direction would be enough to encourage foreign investors, especially at a time when Iran is preparing to privatise a majority of its state-owned enterprises," said Karabekir Akkoyunlu of risk consultancy AKE in London.