The Cabinet on Wednesday approved a proposal calling for state-owned banks to raise their capital and enhance lenders' capital adequacy ratio, Economy Minister Ehsan Khandouzi said.
"An estimated 350 trillion rials ($909 million) is to be allocated for raising the capital of state banks…This should will help improve their capital adequacy ratio except for Bank Melli and Bank Sepah, to above 8% and augment their lending power," Shada news website quoted Khandouzi as saying.
Government-owned lenders include three commercial and five specialized banks. Bank Melli, Bank Sepah and Post Bank of Iran are the three commercial banks.
Bank Maskan (main housing lender), Export Development Bank of Iran, the Bank of Mine and Industry, Cooperatives Development Bank and Bank Keshavarzi (agro bank) are the five specialized banks.
Six of the state banks recently released their financial statements for the fiscal year that ended in March.
A review of their performance shows Melli lost 26.76 trillion rials ($84.4 million). This, however, was 60.3% less than the year before when it reported 67.52 trillion rials ($213m) loss.
The other five banks made 1,780 billion rials ($5.6m) profit. The six banks' accumulated loss increased by 3.1% last year to 867.36 trillion rials ($2.73 billion), the largest portion of which, 695.35 trillion rials, belonged to Melli.
The capital adequacy ratio (CAR) of Bank Melli was 8.7 based on the last financial statement – the year before it was 11.29. The Export Development Bank of Iran had the highest CAR among the six lenders with 12.7, followed by Bank Maskan 8.7 and BIM 2.8.
Data also show that Bank Maskan, Bank Keshavarzi and Cooperatives Development Bank raised capital during the year to March. The six banks collectively generated 543.84 trillion rials ($1.71 billion) from banking operations, posting a y/y growth of 51%.
