Ghavamin Bank, affiliated to Iran's Law Enforcement Forces (LEF), has officially merged with the state-owned Bank Sepah to become the fourth bank to complete the merging process.
CEO of Bank Sepah Mohammad Kazem Choqazardi made the announcement Saturday in a press release published on the bank's website.
Before finalizing the merging process Ghavamin Bank, owned by the police forces or LEF, held an extraordinary general assembly Wednesday attended by the majority of shareholders.
Choqazardi said henceforth all branches of Ghavamin Bank will operate under Sepah’s signboard.
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.
Late last month Kosar Credit Institution merged with Sepah. Earlier in the year two other banks completed the process and now operate as Bank Sepah. Hekamat Iranian was the first in May and a month later Mehr Eghtesad Bank completed the process.
Choqazardi said the last merging bank is scheduled to hold its extraordinary meeting before the end of the current calendar month (Dec. 21). He billed the long-awaited merger a “national mandate”.
CBI Governor Abdolnasser Hemmati has described the merger as "intricate and huge" and "one of the most important measures for reforming the banking industry" that has attracted the ire of most, if not all, manufactures, businesses and the people.
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.
Move to Smaller Cities
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 to which Sepah can move the surplus branches”, 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 reports 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 employees, depositors, shareholders and other beneficiaries.
Concerns will be addressed with “fundamental reforms in the management structure of Sepah and the merging banks.”
