Economy, Business And Markets

Saderat Tops Lenders in Stock Market Activity

Business & Markets Desk
Saderat Tops Lenders  in Stock Market Activity
Saderat Tops Lenders  in Stock Market Activity

Bank Saderat is one of the top 10 most active companies and the top lender operating in the Tehran Stock Exchange. The bank is the largest listed lender in terms of nominal capital in Iran, state-owned news agency IRNA reported. However, the government still owns most of the bank's shares.

According to the bank's public relations office, the TSE's most active companies have been chosen with a special procedure while adhering to regulations and scientific principles.

Stock liquidity, volume of shares traded, trading frequency of the company's stocks, and an index measuring the company's effect on the TSE's indices are calculated for a one-year period and updated quarterly to choose the most active companies on the exchange.

Bank Saderat, with its $1.7 billion capital, has historically held a good position on the most active companies list.

Analysts are expecting it to hold its top position on the list and continue to outperform other banks in profitability in the future, if sanctions against the Iranian banking system are lifted.

"If the sanctions are removed we will be the top bank doing foreign business and making deals with foreign firms," Mohammad Javad Jamshidi, a Saderat Bank executive earlier told Financial Tribune, "other Iranian banks won't compare!"

Poised for Growth

The lender's shares rose 1.48% to a 1,027 rial close on Tuesday , as cues from Vienna indicated that Iran and P5+1—United States, Britain, France, China, Russia and Germany—were close to a deal that would limit Iran's nuclear energy program in exchange for sanctions relief.

Iran is under sanctions by the United Nations, United States, and the European Union over Tehran's nuclear energy program. The sanctions include banking sanctions by the EU which have cut lenders like Saderat from international finance and the banks overseas businesses.

"We are the most experienced Iranian bank and have the largest network of foreign branches and the most expansive set of connections, among Iranian banks," Jamshidi said.

The lender currently conducts banking in the United Arab Emirates, handling Iranian trade in and out of Dubai. Bank Saderat's profits are the 3rd highest among foreign banks in the UAE. The bank mainly deals in project financing, letters of credit and bank guarantees in the UAE.

Saderat stands to gain the most among Iranian lenders if sanctions are eased. The bank's shares have surged 23.4% in the past month as the likelihood of a nuclear deal has increased.

On a Lean Diet

Saderat has been shedding some fat recently by selling its non-banking subsidiaries. The move is in response to the Economy Ministry's directive, telling banks to increase their working capital.

Banks have been running non-banking businesses to cover losses made on their lending in recent years. But the government and the central bank have been pushing them to sell these businesses to increase their liquid assets.

The Tehran-based lender sold its 50% stake in Pars Kani Mineral Industries Research and Development Company in June. Investors were worried that the sale might  reduce Saderat's profits, but the bank's executives assured them that due to Pars Kani's small size (Saderat's stake was valued at $3m) the sale's effect would be negligible. The lender is also preparing to auction its stake in a chromium producer in the near future.

Saderat is one of the largest banks in the Middle East and has 28 international branches providing services in 12 countries, including offices in London, Paris, Hamburg and Frankfurt. It handles 367,000 clients online with an average of 10 million transactions a month. The bank also has 440,500 points of sale, generating over 32 million transactions every month.

In the Spotlight

The bank was recently in the media spotlight, having a hand in handling Mizan Credit Institution's closure.

The Mashhad-based lender was closed down by the Central Bank of Iran for failing to comply with the bank's regulations. The custody of Mizan's accounts was given to Saderat.

It was rumored that Mizan would be merged with Saderat. The bank released a statement to clarify its position regarding Mizan last month, saying it had "no exposure to the institution's liabilities."

Saderat is tasked by judicial authorities to handle the process of reimbursing Mizan's depositors. A debt settlement board, selected by Mizan’s managers, is in charge of selling the institution’s properties and gives the raised funds to Saderat. The lender then uses the money to reimburse Mizan's creditors according to a list provided by judicial authorities.