Gov’t, Private Sector Debt to Banks Soar

Government debts to the banking sector jumped to 2.041 quadrillion rials ($64 billion) by the end of the sixth month of fiscal year (September 21), marking a 17.4% growth from the beginning of the year on March 20.

Data released by the Central Bank of Iran also indicates a 14.5% growth in private sector debt to banks during the same period.

A year-on-year analysis however reveals that government and private sector debt to the banking sector shot up by 26.5% and 27.6% respectively.

Private lenders posted the highest increase in government borrowing, with overdue surging by 20.2% during the first half of the year. Government debt to three state-owned commercial banks and five state-owned specialized banks grew by 7.3% and 16.2%, respectively.

Private sector debt to the banking sector reached 8.427 quadrillion rials ($264.7 billion) by September 21, of which 817 trillion rials ($25.6 billion) was accrued interest. The amount shows a 27% growth y/y, and 15.7% increase compared to six months ago.

Private banks accounted for 64.6% of private sector debts, while specialized (government-owned) banks accounted for 20%.  

Increase in Deposits

The private sector’s total deposits in banks amounted to 10.9 quadrillion rials ($342.4 billion) by September 21, up 11% compared to the start of the fiscal year.

CBI data also shows that 20 plus  private banks accounted for 72.1% of the total deposits, whereas three state-owned commercial banks (Bank Melli Iran, Bank Sepah and Post Bank of Iran) had 17.7% of private sector deposits by the said date.

Term deposits accounted for 83% or 9 quadrillion rials ($282.7 billion) of the money kept with banks. The total amount of term deposits grew 10.6% during the first half of the fiscal year.

Short-term deposits accounted for 42% of total term deposits by September 21, indicating 12.7% growth during the six-month period. The remaining 58% were long term deposits, which recorded 8.9% growth compared to the beginning of the current fiscal.

Qarzol-Hasaneh (interest-free) savings recorded 10.5% growth in the period, reaching 520 trillion rials ($16.3 billion).

Debt of Banks to CBI

Banks owed 942.2 trillion rials ($29.5 billion) to the CBI by the end of the first half of the fiscal year – a 12.7% growth compared with the beginning of the period. Private banks debt to the CBI increased by 45% in the same period.

Government debt to the CBI also registered 22.2% growth during the first half of the fiscal year, rising to 636 trillion rials ($19.9 billion) by September 21.

The numbers also show that banks' total reserve requirement reached 1.1 quadrillion rials ($34.5 billion) by the end of the first half of the year, marking a 13.8% growth in H1 and 23.5% compared to the previous year.

CBI data also showed that the total foreign exchange assets of banks was 2.3 quadrillion rials ($72.2 billion) by September 21 -- a 1.7% growth in H1 and up 2.9% year-on-year.