With loans outweighing deposits, the loans to deposit ratio increased in the month to February 18.
The loan-to-deposit ratio (LDR) reached 81.2% by the end of the month, indicating 0.3 percentage point increase compared to the month earlier.
Compared to the same month the year earlier, LDR registered a 2.7% increase. It rose 1.8% in 11 months since the beginning of previous fiscal year to Feb. 18, the Central Bank of Iran reported.
LDR is used to assess a bank's liquidity by comparing the 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.
The new ratio data was not consistent across the country. The highest was recorded for Ilam Province followed by Kohgilouyeh-Boyerahmad Province at 117% and 115.1%, respectively. The lowest were in Bushehr and Alborz provinces at 34% and 48%, respectively. In Tehran Province it showed 94.8%.
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.
CBI reports indicate total lending jumped by 8,908 trillion rials ($38.7 billion) to reach 27,028.6 trillion rials ($117.5b) -- 49.2% higher compared with the month earlier.
With 17,161 trillion rials ($74.61b), Tehran topped the list of the provinces with the highest amount of outstanding loans.
At the bottom end was Kohgilouyeh-Boyerahmad Province with total outstanding loans reaching 92.1 trillion rials ($400.4 million).
Customers had 37,056.3 trillion rials ($161.1b) in deposits up until February 18. Deposits with banks and credit institutions showed 43.7% rise compared to the same period last year when customers parked 25,780.6 trillion rials ($112b).
As usual the majority of deposits (53.72%) were in banks in Tehran Province. Banks in the capital held 19,906.9 trillion rials ($86.55b) in deposits during the period. Isfahan Province was next with 1,941.7 trillion rials ($8.44b). Kohgilouyeh-Boyerahmad Province was at the bottom end with 90.1 trillion rials ($391.7 million).
