Economy, Business And Markets

Bank of Industry and Mine Gets Capital Boost, Touts Job-Creation Plans

Bank of Industry and Mine Gets Capital Boost, Touts Job-Creation Plans Bank of Industry and Mine Gets Capital Boost, Touts Job-Creation Plans

The government's measures to plump up the capital cushion of public-sector banks will see the capital of Bank of Industry and Mine rise to 60 trillion rials ($1.5 billion), announced the bank's CEO.

"Twenty trillion rials ($519.8 million) will be added to the capital of BIM, which will increase the bank's capital assets to 60 trillion rials ($1.5 billion) and will subsequently increase its capital adequacy ratio to 12%," Ali Ashraf Afkhami was also quoted as saying by IBENA.

The bank will receive the capital as part of the latest plan to increase the capital of seven banks. The Cabinet obligated the Ministry of Economic Affairs and Finance in late January to allocate 200 trillion rials ($5.19 billion) to the plan.

According to a recent study by Majlis Research Center, the minimum CAR for Iranian banks has been set at 8%.

Afkhami said his bank has no foreign debt, though it previously exceeded €500 million as a result of international sanctions.

BIM's chief executive reported that in the past few years, the ratio of non-performing loans of BIM has experienced a steady decline, first going down to 10.5% from 12.5% and then to 7.8%. 

"The bank's ratio of NPLs to total loans outstanding will drop below 7% by the end of the current fiscal year in March," he said.

He added that BIM's NPLs currently stand at 20.9 trillion rials ($543.2 million). 

Afkhami further said that in the first 10 months of the current Iranian year (March 20-January 19), 102 small- and medium-sized enterprises were established through 1.5 trillion rials ($38.9 million) worth of loans from the bank creating jobs for 1,650 people.

"Furthermore, $150 million worth of loans have been allocated to 18 major projects," he said. "We have projects at hand which target137 SMEs with loans worth 425 billion rials ($11 million), the majority of which will take off next year and generate employment for 3,700 people."

Noting that 180 big and medium-sized enterprises will begin work during the next two fiscal years with an investment of 260 trillion rials ($6.75 billion) from BIM, Afkhami said more than €4 million of the amount were in foreign currency.

These projects, he added, will create 33,000 new jobs.

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