Bank Refah to Boost Capital by $2.1b

Iran’s Bank Refah, affiliated with the Social Security Organization, is planning to expand domestic and foreign operations, mainly by raising its capital by 80 trillion rials ($2.1 billion).

"The capital increase has been planned in SSO's budget for the current Iranian year (started March 21)," the bank’s website quoted Taqi Nourbakhsh, the director of SSO, as saying during a ceremony to mark the 57th anniversary of Bank Refah.

One of the major lenders of Iran, Refah is owned by SSO, the primary social insurance service provider for employees of public and private sectors, along with the self-employed.

Nourbakhsh referred to reimbursement of government debt to the bank and said, "More capital increase is on the way.”

In January, the Cabinet approved a directive based on which Management and Planning Organization of Iran has been permitted to clear a portion of the government's debts to the banking system.

According to the directive, Bank Refah was expected to be reimbursed 5.2 trillion rials ($136.4 million).

Nourbakhsh pointed out that some 42 million people indirectly are shareholders of SSO, "Bank Refah has a superb ground for economic activity, considering the large number of SSO's clients”.

Refah should work closely with the organization and its subsidiaries, “as it has the potential for becoming the largest bank in Iran”, he said.

A non-government organization, SSO is solely financed by insurance premium (7% by employees, 20% by the employer and 3% by the government). At present, more than 40 million people in Iran are under SSO coverage.

SSO's director concluded that in recent years, particularly in the year that ended on March 20, 2017, the lender had supported the organization to pay its debts to hospitals and pharmacies, which had a significant impact on the organization's successful performance.

Bank Refah has also announced that it has linked up with Austrian Oberbank by establishing an account to expand its international operations and benefit from ties with foreign bank.

In the wake of new developments, opening letters of credit and issuing payment orders are now possible through Refah’s branches across the country, reads a statement published on the bank’s website.

In June, Austria's Finance Minister Hans Jorg Schelling had announced in his meeting with Iran’s former economy minister, Ali Tayyebnia, that Oberbank, one of Austria’s biggest banks, allocated a €1 billion ($1.18 billion) line of credit to finance investment projects in Iran.