Loans to deposit ratio stood at 80.2% in the last month of the previous fiscal year that ended on March 21, down 1 percentage compared to the preceding month.
The ratio, however, increased by 0.8 percentage point y/y, according to data released by Central Bank of Iran.
LDR is used to assess a bank's liquidity by comparing total loans to total deposits for a specific period and is expressed in percentage.
If the ratio is too high, the bank may not have enough liquidity to cover unforeseen fund requirements. Conversely, if it is too low, the bank may not be earning as much as it should be.
The ratio in Tehran was above the average at 93.5%. Kohgilouyeh-Boyerahmad Province recorded one of the highest LDRs at 105.9%.
The general LDR ratio has been of the ascending order since 2018 when it stood at 85.7%. It declined to 76.5% in the month ending July 21, 2020 and grew steadily to reach 81.3% in November of that year before declining again.
The decline has been due to the increase in bank deposits keeping pace with rise in loans payment. According to CBI data, total outstanding loans (non-performing and performing loans) amounted to 27,922.7 trillion rials ($116.7 billion), indicating a 44.3% growth y/y. During the same period a year before total outstanding loans stood at 19,355.8 trillion rials ($80.6b).
Tehran was first with the highest number of loan defaults, crossing 17,698.2 trillion rials ($70.8b) and Isfahan was next with 1,049.16 trillion rials ($4.2b).
Likewise, with 95.6 trillion rials ($382.4 million) in outstanding loans, Kohgilouyeh-Boyerahmad Province was at the bottom end.
Total deposits held in banks and credit institutions were 38,754.6 trillion rials ($161b) in the month to March 21. It increased by 11,591.8 trillion rials ($48.3b), indicating a 42.7% growth compared to the corresponding period last year.
As always, Tehran Province topped the list of provinces with the highest deposits crossing 20,818.4 trillion rials ($86b), accounting for 53.71% of the total deposits.
Next was Isfahan Province with 2,008.9 trillion rials ($8.5b) followed by Khorasan Razavi Province with 1,691.82 trillion rials ($7b). Kohgilouyeh-Boyerahmad Province was last with 101.8 trillion rials ($407.2m).
