Deposits with banks and credit institutions reached 27,766 trillion rials ($126.2 billion as per Saturday’s forex rates) up until the end of the calendar month to April 19.
Bank deposits increased by 6,941.7 trillion rials ($31.5 billion) compared to the corresponding month last year, indicating 33.3% y/y growth, according to data released by the Central Bank of Iran on its website.
Compared to the preceding month, bank deposits grew 603.9 trillion rials ($2.7 billion), up 2.2%.
Data showed more than half the total deposits were held in bank branches in Tehran Province -- 15,181.3 trillion rials ($69 billion).
Next on the list was Isfahan Province with 1,455.7 trillion rials ($6.6 billion) followed by Khorasan Razavi Province 1,230 trillion rials ($5.6 billion).
At the lowest end were banks in Kohgilouyeh-Boyerahmad Province with 72.5 trillion rials ($327.2 million), Ilam Province with 87.6 trillion rials and North Khorasan with 99.7 trillion rials.
Loans
Outstanding loans rose by 4,461.4 trillion rials ($20 billion) to reach 19,568.6 trillion rials ($89 billion) by mid-April, showing 29.5% annual growth. Compared to the month before, outstanding loans registered 1.1% rise.
Unpaid loans in Tehran Province amounted to 12,666.2 trillion rials ($57.5 billion) or almost 65% of the total.
Isfahan Province was next with 714.7 trillion rials followed by Khorasan Razavi with 600 trillion rials in outstanding loans.
As usual, Kohgilouyeh-Boyerahmad Province was at the bottom of the list with 68.3 trillion rials.
LDR at 78.5%
The loan-to-deposit ratio (LDR) stood at 78.5% in the month to April 19, down 2.3% year-on-year and 0.9% lower compared to the month before.
The ratio for Tehran Province was 91.9% and for Kohgilouyeh-Boyerahmad Province 106%.
LDR is used to assess a bank's liquidity by comparing total loans to total deposits for a specific period and is expressed in percentage.
If the ratio is too high, the bank may not have enough liquidity to cover unforeseen fund requirements. Conversely, if the ratio is too low, the bank may not be earning as much as it should be.
LDR has been of the declining order since the beginning of fiscal 2018-19, which is a strong sign of banks’ increasing unwillingness and possibly inability to lend.
As per the CBI data, the ratio was 85.7% in fiscal 2018-19, declining more than 7 percentage points ever since.
The decline in LDR can also be ascribed to lenders’ increasing tendency to err on the side of caution when giving loans given the piling up of non-performing loans, bad debts and economic instability.
