Economy, Business And Markets

Banks’ Assets Worth $860m for Sale

Banks’ Assets Worth $860m  for Sale Banks’ Assets Worth $860m  for Sale

An auction is planned for March 8 to sell the banking sector's excess assets, said Hassan Yamani, head of the Company for Selling Banks’ Excess Assets (FAM) on Friday.

“The Bank of Mine and Industry, Bank Tejarat, Bank Refah, Bank Keshavarzi, Bank Sepah and the Export Development Bank of Iran will sell 500 properties worth 26 trillion rial ($860 million),” he was quoted as saying by IRNA.

This is the eleventh auction for selling banks’ excess assets.

The official said his company had sold 120 properties since the beginning of the fiscal year (March 21) with a total value of 500 billion rials ($16.5 million).

 “FAM has sold a total of 158 properties since its establishment in 2009, with a total value of 5.5 trillion rials ($182 million),” he added.

Yamani also criticized Bank Mellat, a private lender, and Bank Maskan, a state-owned lender, for not taking an active part in the auctions.

The Company for Selling Banks’ Excess Assets was founded in 2008, following the approval of Central Bank of Iran and Ministry of Economic Affairs and Finance. FAM’s shares are held by 10 banks.

Iranian lenders have been urged to minimize their non-banking activities and sell excess assets to raise capital since their botched investments in the real estate market caused them much pain in recent years.  

According to CBI statistics, bad debts amount to 938 trillion rials ($32.8 billion). The dangerously high amount of toxic loans – mostly incurred by state-owned banks – has called the solvency of some banks into question, and eroded their ability to lend, threatening the stability of the banking system.