Kosar Credit Institution officially merged with the state-owned Bank Sepah to become the third financial entity to complete the merging process.
The CEO of Bank Sepah Mohammad Kazem Choqazardi made the announcement on Saturday in a press release published on the bank's website.
"The merger was completed after Kosar held an extraordinary general assemby on Wednesday attended by majority of shareholders", the senior banker said.
According to Choqazardi, all Kosar branches are functioning under Sepah signboards from Thursday.
The megamerger started in March 2019 as part of the policy of the Central Bank of Iran to streamline the dysfunctional banking industry and improve efficiency.
Ansar Bank, Bank Hekamat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar are five institutions involved in the merger.
Earlier in the year, two of the banks completed the process and are now officially operating under Bank Sepah.
Bank Hekamat Iranian was the first in May and a month later Mehr Eghtesad Bank completed the process.
Choqazardi said the remaining two are scheduled to complete the process by next month. He called the long-awaited merger a “national mandate”.
CBI Governor Abdolnasser Hemmati has described the merger as "complex and huge" and "one of the most important plans for reforming the banking industry."
Staff and Branches
The five banks have 2,800 branches that will join Sepah’s 1,800 branches. The latter, however, is planning to cut the number of branches to 3,500 in three years, but insists that cutting branches does not necessarily translate into layoffs.
Pointing to the anticipated increase in Bank Sepah branches after the merger, Abbas Memarnejad, a deputy economy minister, said the bank could move “extra branches” from big cities to smaller urban areas.
“The Ministry of Economy has prepared a list of cities with populations over 10,000 that lack banks. Bank Sepah can move the surplus branches to those cities,” Memarnejad said.
Sepah had earlier announced a three-year timeline to close 1,000 branches of the combined lenders after the merger.
According to published surveys, the number of Bank Sepah employees will rise from the present 15,000 to 43,000 when the “new bank” is fully established.
Hadi Feiz Akhalqi, a Bank Sepah deputy, underscored efforts to address concerns of bank employees, depositors, shareholders and other beneficiaries.
The concerns would be addressed with “fundamental reforms in the management structure of the Bank Sepah and the merging banks,” Feiz Akhalqi said.
