26884
Gov’t Banks Saddled With Toxic Assets
Economy, Business And Markets

Gov’t Banks Saddled With Toxic Assets

The former head of the Supreme Board of Iranian Certified Accountants Association claimed that government-owned banks, by holding 20% of non-performing loans, account for 600-700 billion rials ($19.8 million-$23.2 million at the official exchange rate) of total toxic assets.
Qolam Reza Salami noted that state-owned banks have more toxic assets than private banks and said, “Government-owned banks have allocated much of their resources for non-banking activities such as real estate and the stock market. Now that the country’s economy is in recession they are stuck and facing major problems because they cannot liquidate their assets,” Eghtesadnews quoted him as saying.
He referred to a recent suggestion by the Minister of Roads Abbas Akhoundi  for the establishment of a settlement bank to resolve the problem of toxic bank assets and said, “Government, not the private sector, must resolve these issue as most of the toxic assets belong to state banks.”
The CA said of the three types of banks in Iran [commercial government-owned, specialized government-owned and private banks], government-owned lenders have caused most of the problems.
“[By government-owned banks] I also mean former state-owned banks that despite being considered as private are actually run as state banks,” he added.
Salami believes that cutting interest rates artificially further dragged the lenders into red ink.  He referred to the mushrooming growth of bank branches as another non-banking activity of state-owned banks, and said most branches not only add no substantial value to the lenders but rather incur extra cost and pain.
“If the government is really planning to clear banks from toxic assets, it should consider providing alternative resources for them,” he said, implying the sale of the huge bank assets including their expensive property/branches in upscale areas of big cities.
Iranian lenders in total are saddled by an estimated 938 trillion rials ($32.9 billion) of non-performing loans accumulated largely during the government of former president Mahmoud Ahmadinejad (2005-13). The figure doubles if restructured loans are added to the troubling list. Bad loans have seriously eroded the lending power of most state-owned banks, driving up the cost of money.

Short URL : https://goo.gl/ZK86ij
  1. https://goo.gl/UBbW5r
  • https://goo.gl/SsZa5s

You can also read ...

Nat’l Virtual Currency in the Offing
Months after the idea was first publicized, it seems that Iran...
Valiollah Seif
Governor of the Central Bank of Iran said on Wednesday anti-...
Lexus’ New Crossover to Break Cover  in March
Lexus will pull the covers off of the production version of...
5th Indian Wheat Cargo Arrives for Afghanistan in Chabahar
India’s fifth consignment of wheat to be sent to Afghanistan...
Presale Crosses  96,000 Gold Coins
The presale of Bahar Azadi gold coins priced at 14 million...
27m Chickens Culled Since Avian Flu Outbreak
More than 27 million chickens have been culled since the...
Bank Loans Top $100b in 10 Months
Banks and credit institutions doled out more than 4.62...
SCI Puts Inflation  at 8.3%
The average goods and services Consumer Price Index in Iran...

Trending

Googleplus