Economy, Business And Markets

6 Property Sales by Banks Before Yearend

6 Property Sales by Banks Before Yearend 6 Property Sales by Banks Before Yearend

Six auctions are to take place by the end of the fiscal year (March 20, 2017) for selling the excess properties of banks, said the head of the Company for Selling Banks’ Excess Assets aka Fam.

“The plan comes as expert analysis points to a boom in the housing market by the end the current year,” also quoted Hassan Yamani as saying on Tuesday.

Fam has held 64 auctions so far, selling 1,600 pieces of property owned by banks and generated 6 trillion rials ($193.1 million).

“Bankers should insist on selling their excess property,” Yamani said, adding that retaining extra assets is costly, whereas selling them would play a significant role in creating new jobs and helping industries resume their operations.

Referring to recent changes in Fam’s statute, he said “now we are allowed to offer similar services to other entities, including ministries, governmental organizations and non-governmental bodies.”

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 get rid of excess assets to raise capital after their botched investments in the real estate bubble caused them much pain in recent years.  

The CBI has directed lenders to get rid of unwanted assets within three years. However, the prolonged recession in the housing market frustrated banks’ efforts to turn their immovable property into hard cash.

To add insult to injury, the toxic debts of lenders also presented challenges to the banking system. The dangerously high amount of such debts has called the solvency of some banks into question and eroded their ability to lend.