Economy, Business And Markets

Bank Saderat Sells Shares in Investment Co.

Bank Saderat Sells Shares in Investment Co.
Bank Saderat Sells Shares in Investment Co.

It seems that major banks have eventually started to follow a CBI directive urging them to focus on banking rather than non-banking activities.

Now, Bank Saderat has sold less than 10 percent of its shares of Ghadir Investment Company (GIC) after the government called on banks to sell their shares in businesses unrelated to what they are actually supposed to do, i.e. providing banking services to their customers. The bulk of shares is all Bank Saderat holds in GIC as the investment company’s main stockholder.  

Bank Saderat offered more than 1.73 billion GIC shares, worth 13,830 billion rials, at the Tehran Stock Exchange on Monday to practically end its membership in the GIC board of stockholders. Only 30 percent of the block trade was carried in cash, with each share offered at the base price of 7,982 rials.

The oil pension fund, which holds 7 percent of GIC shares, was widely expected to buy Bank Saderat’s GIC shares.

During the past decade, Iran’s biggest banks invested heavily in the ownership and management of commercial entities outside their traditional areas. Non-banking business activities have brought the banks large returns. In recent months, the government has stepped up criticism against the banks’ non-banking activities. The Central Bank of Iran even issued a decree warning that the banking system’s investment in the non-banking sector should not exceed 40% of their total capital.

The CBI has given the banks three years to sell buildings, land and stocks belonging to their subsidiaries. The move is aimed at pushing the banks to lend to the country’s leading industries, which have been badly hit by mismanagement from inside and sanctions from outside.