Support for Bank Mergers

The merger of distressed small financial institutions with major banks will help solve the sector’s problems, the director of research department at the Banking and Monetary Institute said. “The Central Bank of Iran concluded that if a small bank or credit institution grapples with problems, it could be merged into a larger bank,” Hamid Zaman-Zadeh was quoted as saying by IBENA. Zaman-Zadeh noted that the preferred strategy should be to merge these small banks and credit institutions into strong banks with few troubles, otherwise a new crisis is imminent. The Central Bank of Iran earlier announced that it considers mergers as a solution for struggling banks only when other options fail to solve their problems.