Data released by the Central Bank of Iran indicate that total lending by banks was higher than deposits during the calendar month to Dec.20.
Loans crossed 25,709.3 trillion rials ($102.8 billion) – up 47.7% compared with the corresponding period last year. In the first three quarters of the current fiscal year, total outstanding loans rose by 6,353.6 trillion rials ($25.4b) or 32.8%.
This is while total bank deposits increased by 42.4% on an annualized basis to reach 35,205.9 trillion rials ($140b). Deposits increased 29.6%, or 10,489 trillion rials ($32.17b) in the first nine months of the current fiscal year that ends on March 20.
With more than 16,448.1 trillion rials, Tehran Province topped the lending list. At the bottom end was Kohgilouyeh-Boyerahmad Province with total unpaid loans reaching 87.1 trillion rials ($348 million).
Deposits with banks in Tehran Province also accounted for slightly less than half the total. About 18,937 trillion rials ($75.7 b) in deposits were held with banks in the capital during the period.
Loan-to-deposit ratio declined 0.2 percentage point compared to the previous month. However, the LDR stood at 81.2% in the month to Dec.20 -- 2.7 percentage point higher than in the same month last year. It was also 1.8% higher compared with the beginning of the current fiscal year.
The ratio is used to assess a bank's liquidity by comparing total loans to total deposits for a specific period and is expressed in percentage.
According to the CBI report, the ratio was not consistent across the country. For example, it was 95.4% in Tehran Province and 112.3% in Kohgilouyeh-Boyerahmad Province.
The general LDR ratio was of an ascending order since fiscal 2018-19 when it stood at 85.7 before rising again. It declined to 76.5 in the month ending July 21 and has grown steadily ever since.
Rise in LDR could be attributed to banks’ increasing inclination to lend. Banks and credit institutions gave 12,199.4 trillion rials ($48.7b) in loans to businesses in the first nine months of the current fiscal year (March 20-Dec. 20, 2020).
Compared to loans in the first three quarters of the previous year, the amount increased by 5,936.7 trillion rials ($23.7b) and almost doubled.
