Business And Markets

Majlis Wants Economy Minister to Account for Bank Megamerger

Majlis Wants Economy Minister to Account for Bank Megamerger
Majlis Wants Economy Minister to Account for Bank Megamerger

The Majlis Commission for Article 90 has asked the economy minister to provide details of the megamerger involving five military banks and the state-owned Bank Sepah in December.
In an interview with Fars News Agency, Nasrollah Pejmanfar, head of the commission, said the parliament has received reports on inconsistencies in the merger process. For this purpose the Minister of Economy Farhad Dejpasand will go to the legislature to answer MPs’ queries.
Commission for Article 90 is a non-specialized permanent commission of the parliament. Its members want to look into the process of valuation and pricing [assets of] the merged banks and post-merger staff issues.
Pejmanfar said employees of the merged banks have complained about wages and welfare after the rare and much-publicized merger.
Alleged haste in the merger is among issues to be discussed with the minister. "It seems that the plan was implemented without [proper] preparation," the MP said without elaboration. No details were included in FNA's report.
The merger was first announced in 2014 but was launched in 2019 as part of the policy of the Central Bank of Iran to streamline the dysfunctional banking industry and improve efficiency.
It was often reported in the media that the merged banks were saddled with weak balance sheets due to unhealthy competition with peers and violating CBI rules governing lending and interest rates.
Ansar Bank, Bank Hekamat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar are the five institutions. The five now operate under the name and logo of Bank Sepah.
The megamerger transformed Sepah into the biggest lender in Iran in terms of deposits, branches and payroll, overtaking Bank Melli, the other top state-owned lender.
Sepah now holds an estimated 4,750 trillion rials ($20.5 billion) in deposits, which is 50% higher than Bank Melli. The amount is 18% of the total financial resources of Iran’s banking industry.
Prior to the merger the Sepah was said to be worth 1,600 trillion rials ($7 billion).
Sepah’s staff increased from 14,000 before the merger to nearly 44,000 now. Regarding branches, the five along with  Sepah had 3,800 branches.


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