Private Banks’ Liabilities to CBI Double

The total arrears of 27 Iranian private banks and non-bank credit institutions to the Central Bank of Iran up to July 22 stood at 494.1 trillion rials ($12.6 billion), marking a significant growth of 14.7% compared to the previous month.

This is while according to CBI’s statistics, the volume of private lenders’ debts to the central bank surged dramatically in the last Iranian year (ended March 20, 2017).

A year-on-year comparison of private banks’ debts to CBI till April 20, 2017, indicates a 165.7% leap, which happened when private lenders offered high interest rates to their customers to retain their investments.

However, CBI's report indicates that both commercial and specialized banks curbed their liabilities to CBI during the year to July 22.

By the end of the fourth Iranian month to July 22, the total volume of six state-run specialized banks' debts to CBI stood at 505.2 trillion rials ($12.9 billion), registering a drop of 12.6% year-on-year.

Commercial banks have also managed to significantly reduce the amount of arrears to CBI as of July 22, the collective volume of their debts stood at 79.4 trillion rials ($2.03 billion) which indicates a 55.9% Y-O-Y drop.

All in all, the total volume of banking systems' arrears to CBI up to July 22 marked an 18.7% growth to reach 1.07 quadrillion rials ($27.4 billion).

Deposits

The private sector’s deposits in the Iranian banking system as of July 22 reached 12.99 quadrillion rials ($333 billion) to register an annual increase of 23.8%.

Private banks and non-bank credit institutions absorbed 70.36% of the entire volume of people’s deposits in the banking system. The figure reached 9.1 quadrillion rials ($233.3 billion), which is up 38.2% YOY.

The volume of private sector's deposits in commercial banks up to July 22 stood at 2.5 quadrillion rials ($64.1 billion), marking a growth of 38.2% to own 19.73% of all the private sector's investments in banks.

This is while specialized banks absorbed 1.2 quadrillion rials ($30.76 billion) from people's deposits, up 20.5% YOY. Specialized banks accounted for 10% of the total deposits in the Iranian banking system.

The lion’s share of deposits were in the form of non-sight deposits that accounted for 90.3% of the total volume at 11.74 quadrillion rials ($301 billion), up 24.6% YOY. Sight deposits absorbed only 1.25 quadrillion rials ($32 billion), constituting 9.7% of the total sum.

The total volume of banks’ reserve requirements in CBI also witnessed an annual growth of 20.8% and reached 1.34 quadrillion rials ($34.3 billion), as a result of the establishment of new banks and credit institutions, as well as the significant recapitalization of state-owned banks. However, banks’ sight deposits in CBI declined by 10% and stood at 52.7 trillion rials ($1.35 billion).

Liquidity and Foreign Assets

Money supply exceeded 13.33 quadrillion rials ($341.7 billion) by the end of the fourth Iranian month, up by 23.3% YOY, according to the CBI data.

The volume of monetary base and money in circulation grew by 14.4% and 24.6% respectively compared with the previous year.

Data released by CBI for the month ending July 22 put  banks’ total foreign assets at 5.7 quadrillion rials ($146.15 billion), marking a growth of 5.1% compared with the same period of last year.

Almost 58% of the entire banking system’s foreign assets worth 3.4 quadrillion rials ($87.17 billion) belong to CBI. The value of CBI’s foreign assets up to July 22 increased by 3.6% YOY.

Private banks’ foreign assets, which constitute 25.8% of the total sum, also improved by 5.3% to reach 1.5 quadrillion rials ($38.4 billion).

However, commercial and specialized banks’ foreign assets, which only account for 16% of the banking system’s foreign assets, marked a respective increase of 2.3% and 16.2% year-on-year.