Total deposits in banks and credit institutions grew by 47% by the end of the first quarter of the current fiscal year (started March 2021), to 43,149 trillion rials ($158.6 billion).
Deposits were 11.3% higher during the first three months of the year, according to figures published by the Central Bank of Iran.
As usual, the majority of deposits were in Tehran Province at 23,796 trillion rials ($87.4b), accounting for more than half the total.
Kohgilouyeh-Boyerahmad Province was at the bottom end with 100.43 trillion rials ($269 million).
Total outstanding loans, including both performing and non-performing, outgrew deposits and rose 53.8% to reach 31,746 trillion rials ($116.7b) -- 13.7% higher compared to the beginning of the last fiscal year.
With 20,860 trillion rials ($76.7b), Tehran Province topped the list with the highest loans paid and Kohgilouyeh-Boyerahmad Province was at the bottom with 98 trillion rials ($360m) in outstanding loans.
Last year the Money and Credit Council allowed banks to raise interest on term deposits, apparently to curb the scale and scope of money flooding into some financial markets and avoid further depreciation of the national currency.
Banks' loans-to-deposit ratio was 81.5% compared to the previous year's corresponding period that was 77.8%. The ratio also increased in the first three months of the year standing at 80.2% at the beginning of the said period.
LDR has increased steadily since July 2020, indicating that loans are outpacing deposits. LDR is used to assess a bank's liquidity by comparing total loans to total deposits for a specific period and is expressed in percentage.
High LDRs mean 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 ideal LDR ratio is 80% to 90%. A ratio of 100% means a bank loaned all that it received in deposits. It also means the bank will not have enough reserves for contingencies.
While the CBI has not imposed LDR requirements on banks, monetary and banking experts in Tehran familiar with the banking industry say LDR ratio of 65% would be acceptable given the unhealthy state of banks.
