Banking assets and liabilities Banking and insurance in Iran

1 banking assets , liabilities

1.1 debts central bank of iran
1.2 overdue loans
1.3 summary of assets , liabilities of banking system
1.4 capital ratios

banking assets , liabilities

bank melli, saderat , sepah iran s 3 largest banks. government plans clear government arrears, recapitalize banks , strengthen supervisory powers (2016). imf estimates public debt high 40% of gdp once government arrears private sector recognized.

debts central bank of iran

the total debt of 11 state-run banks central bank of iran has exceeded $32 billion in 2009, showing 10-fold increase on past 4 years. bank melli iran (aka national bank of iran), $9 billion, had biggest debt followed bank sepah, iran s oldest, $4.8 billion. bank maskan, bank keshavarzi, bank of industry , mines , export development bank of iran next respective debts of $4.7, $4.1, $3.5 , $1.1 billion. private sector banks had lower debts. bank parsian, largest private-run bank, owed $421 million central bank. in addition, collective debt of state-sector companies central bank has reached $25 billion (2009).

debts of banks central bank stood @ 836.1 trillion rials ($27.3 billion @ official exchange rate) end of fiscal year ended in march 2016. private banks debts amounted $4.06 billion. 5 specialized bank, state-run, accounted $18.7 billion (or 68.5 percent) of banking sector debts central bank march 2016.

overdue loans

according unofficial figures, overdue loans have reached ir175,000bn ($17.8bn, €13.6bn, £11bn), increase of 75 per cent on 3 years (november 2008). plan inject $13 billion recapitalize banking sector (2008). ninety individuals have managed secure collective facilities totaling $8 billion iranian banks, previous $27 billion unpaid loans (2009).

in october 2009, iran s general inspection office informed iranian banks have usd 38 billion of delinquent loans, while capitalized @ usd 20 billion. current average late debts of iran s state banks on 15 percent while global standard 3 5 percent. non-performing loans peaked @ 17 percent of total loans in 2013, representing 10 percent of non-oil gross domestic product, according imf.

regarding corruption , cronyism in banking sector, tehran prosecutor general abbas jafari dowlatabadi said in 2016:

banking has been safe haven in such cases corruption incubate, high-ranking management turning blind eye on corruption underway in inner organizational levels , or actively participating gain illicit interests [..] 11 banks had paid sum of $2.5bn, 1287 individuals filing insolvency; deadlock solved requires 3 fundamental approaches; first remains banks adapt stricter roles , criteria granting loans; bank directors should in frontline of fight corruption; no run of-the-mill entrepreneur should receive inordinate amounts without putting in stake enough guarantees; cronyism should abolished , unqualified evidence should not lent credence individual’s credentials receiving loans.

summary of assets , liabilities of banking system

in fy 2004 balance sheet of banking system showed total assets , liabilities us$165 billion, increase of 226 percent since 1976. in year, bank assets divided follows: private debt, 34 percent; government debt, 16 percent; , foreign assets (90 percent foreign exchange), 22 percent. liquidity funds (money , quasi-money) accounted more 39 percent of total liabilities. loan-to-deposit ratio 100.8% in 2011. in 2014 non-performing loan ratio reported around 18%. 2017, government required pay $12.5 billion domestic banks settle debts. new report shows assets of iranian banks increased whopping 40% in 2014.

in 2014, total capital of iranian banks reached unprecedented figure of 13.3 quadrillion irr ($480 billion), increase of 3.8 quadrillion irr ($138 billion) on 2013 (i.e. 17% increase on 2013). deposits in iranian banks 2014 reached 5.9 quadrillion irr ($214 billion) , loans paid public totaled 5 quadrillion irr ($183 billion). deposits indicate growth of 34% while loans 22% compared 2013.

(1) excludes commercial banks’ branches abroad. of march 2010, bank saderat iran, bank mellat, tejarat bank, , refah kargaran bank have been classified private banks.

as of september 2014,

assets: banks , financial institutions, total claims on public sector (government , governmental institutions) amounted 929 trillion irr ($34.8 billion), , total claims on non-public sector amounted 5412 trillion irr ($203 billion). ratio of claims on public sector claims on non-public sector 17.2% in september 2014, 15.6% 1 year before, , 13.4% 2 years before. trend suggests government using more bank resources previously, , banks getting more dependent on government’s solvency.

liabilities: deposits of non-public sector amounted 6245 trillion irr ($234 billion) of 78.4% term deposits; number 74.5% 1 year before , 73% 2 years before. trend towards more term deposits , less sight deposits result of higher cost of money, downward trend in inflation rate, , stability in economy. breakdown of term deposits shows 44 percent of term deposits short-term , rest long-term. in line these changes, taking @ yield curve last 5 years shows right side of curve has moved upward , left side has become steeper, making long-term deposits more attractive.

capital ratios

the average capital adequacy ratio of iranian banks 4%, whereas according international financial soundness indicators, standard of capital adequacy ratios in basel ii , basel iii above 8% , 12%, respectively. according imf in 2016:

such tests identify shortfalls in capital or risk management practices, [iranian] banks should required present , implement time-bound plans remedy these shortfalls. bank not viable after such process should resolved.