Banks Shed $3.5b  in Excess Assets
Banks Shed $3.5b  in Excess Assets

Iranian Banks Shed $3.5b in Excess Assets

Iranian banks have sold more than $3.5 billion in excess properties in the fiscal 2016-17 in a nod to a mandate accorded by the government
The government is not increasing forex rates and will continue to manage them

Iranian Banks Shed $3.5b in Excess Assets

As part of the government’s plan for lenders to do away with excess assets and become more agile, more than 150 trillion rials ($3.5 billion) worth of bank properties have been sold during the fiscal 2016-17, the economy minister said.
“This volume has resulted from selling [banks’ excess assets] according to the official data of banks from last year, but it is not yet satisfactory in light of the total volume of excess assets,” Masoud Karbasian was also quoted as saying by the official news portal of the ministry.
The official stressed that banks must block their assets and constantly strive to turn them into liquidity to support the production sector.
Banks’ excess assets mostly accumulated in the form of real estate during the housing boom of 2011-12, which proved to be a bubble that landed in a long-running recession.  
A committee comprising the Economy Ministry, the Central Bank of Iran and the Audit Organization of Iran has been formed specifically to receive and evaluate reports of banks offloading their excess assets, Karbasian said, adding that Bank Melli Iran, Tejarat Bank and Bank Sepah have so far handed in their reports and the rest will follow soon.
According to Karbasian, the Money and Credit Council, the decision-making body of CBI, is eying further cuts to loan rates that currently stand at 18%.
“Interbank interest rates have also decreased to 18% while they had risen to more than 30% before,” he added.
As to another significant surge in foreign exchange rates that had seen the US dollar’s exchange rate rise to its peak of 42,000 rials, he attributed the phenomenon to the approach of Christmas, reassuring that after the Iranian month of Dey (ending Jan. 20), “forex rates would embark on a falling trajectory as rate management is actively implemented”.
“The government is not increasing forex rates and we will continue to manage the rates,” Karbasian emphasized.
According to the minister, the government has cleared more than 320 trillion rials ($7.61 billion) of its debts by swapping them, publishing treasury bonds and making cash payments, signaling a 5% year-on-year improvement.

The Outlook

To realize the 8% GDP growth rate envisioned as part of the Sixth Five-Year Development Plan (2017-22), he noted that 25.3% of the required resources must be provided through foreign capital and 24.7% must come through bank loans while asset acquisition and capital market must account for 12.4%.
In the first 100 days of the second term of the administration, a total of $28 billion has been finalized in foreign finance deals while banks and the capital market have been cooperating.
Karbasian criticized incorrect statistics regarding contraband, saying Iran has mounted an extensive effort to combat smuggling and people should only refer to official data published by the Islamic Republic of Iran Customs Administration.
As to the capital market, the minister said, “We thought that the stock market would fall slightly as bank interest rates were decreased, but it actually welcomed this.”
In recent days, Tehran Stock Exchange’s main index TEDPIX and the main index of the smaller over-the-counter exchange Iran Fara Bourse registered notable gains, with TEDPIX registering an all-time high.
He emphasized the ministry’s approach that the trading of no shares should be halted in the Iranian capital market, which currently pertains to 14 enterprises.
“Of this number, six ticker symbols are being reopened while the rest are mainly banks that must provide their balance sheets so that their annual general meetings can be held,” Karbasian said.
“We aim to alleviate the problems of state-owned banks within the next three months and are applying pressure through the Stocks and Security Organization and the central bank to clear the hurdles for private banks as well,” he concluded.

Short URL : https://goo.gl/VaKuoS
  1. https://goo.gl/AMYVyY
  • https://goo.gl/Tu7JmL
  • https://goo.gl/W4yjA8
  • https://goo.gl/cpZimN
  • https://goo.gl/SwHXEu

You can also read ...

China is a rapidly growing market for technology services, and this new region could help AWS capitalize on that.
Amazon Web Services announced the general availability of its...
TEDPIX gained 1,076.50 points or 1.18% to end trade at 92,628.9, the highest it has ever been.
Tehran Stock Exchange's main index broke above the 92,000...
Startup Offers Smart Home Security Service
A local startup has been launched delivering smart home...
HP has issued a software patch for its customers to remove the keylogger.
Hidden software that can record every letter typed on a...
Reportedly Samsung is on target to expand the iris scanner  to its budget phones by late 2018 or early 2019.
Samsung will reportedly bring several upgrades to the iris...
The rial had weakened to its all-time low in the past week, reaching 42,000 per dollar before gaining some ground.
Governor of the Central Bank of Iran Valiollah Seif tamped...
Airbus, Boeing Executives to Visit Next Week
Executives from aircraft manufacturers Airbus and Boeing are...
No Hefty Leap in Home Prices Till March 2018
Home prices in Iran are bound to jump if the US dollar’s rally...

Add new comment

Read our comment policy before posting your viewpoints

Enter the characters shown in the image.