Financial statements of several banks and credit institutions listed in the stock market show most are disinclined to lend.
Financial data of 11 banks analyzed by the Economy Ministry news website suggest that ten reported less than 10% growth in lending in the first four months of current fiscal year (March 21- July 22)
“Annualized growth in loans was much less in five banks falling below 5%,” Shada.ir reported.
This is while nine out of 11 banks had shown double-digit growth in lending in the first four months of the last fiscal year, including four banks with 20-30% rise.
Bank Mellat, Bank Saderat, Middle East Bank, Sina Bank and Eghtesad Novin Bank are among those that significantly reduced lending.
For example, growth of outstanding loans in Bank Mellat dropped from 29.8% in the first four months of last year to 6.2% in the same period this year. It fell from 18.7% to 3.4% in Bank Saderat and from 26.3% to 3.7% for Middle East Bank.
Post Bank was alone in reporting loan growth of 9% in the first four months of fiscal 2022-23, up from 5.4% in the same period last year.
In a report last month, the Economy Ministry linked the decline in loans to moves by the central bank to curb issuance of money by banks.
It said outstanding loans increased by 3.6% in the first quarter of current fiscal year (ended June 21).
The growth was lower from the 13.6% rise in outstanding loans in the corresponding period last year.
Decline in lending means banks pumped less money into the economy, which by extension reduced the growth of monetary base and money supply.
The ministry said the development was an outcome of better financial discipline and stronger supervision of banks by the Central Bank of Iran.
The regulator has imposed tough disciplinary measures on dysfunctional banks and their controversial lending practices. It has set higher reserve requirements ratio for banks with weak performance.
Earlier, the Money and Credit Council allowed the CBI to increase the reserve requirement of distressed banks to 15%, up from the maximum 13% in the past.
