Bank Maskan is expanding its business in a bid to maximize its lending power in the housing market and increase profitability.
The bank created two new financial service firms in the past year, according to its chief executive, both aimed at increasing the bank’s presence in equity markets.
The state-owned lender has created an investment bank to expand into underwriting and M&A advisory services, and boost the variety of its financial products.
Iran’s financial industry is growing rapidly. Since changes were made in Iran’s financial laws in 2008, many new financial services firms and various financial instruments have been introduced. Investment banks are one of the entrants into Iran’s financial industry. The oldest, Amin Investment Bank, is only seven years old. But their role in the financial industry is increasing as new financial products are introduced and new companies go public.
Furthermore Bank Maskan created the first Construction Fund (CF) and officially listed it on the board of Iran FaraBourse over-the-counter market.
CFs are a form of mutual fund created to provide an alternative financing source for construction projects. The money raised by the initial sale of the CF shares is used to finance the project by the underwriter. Shares of the fund are tradable on an exchange with the underwriter and market makers, tasked to assure liquidity and investor confidence in the project. Each CF can finance a single construction project, greatly increasing its non-systematic risk—risk pertaining to each project, as opposed to pooling many construction projects together in one fund.
