Iranian banks have suffered losses

According to the state-run Fars news agency, affiliated to Revolutionary Guards (IRGC), the review of the Iranian banks’ financial statements from 2013 to various seasons of 2016 shows that the banks’ profits have fallen sharply during this time period, and even some banks have suffered heavy losses.

Latest reports indicate that at least eight banks have suffered losses, and it appears that if there are audited financial statements for all banks in the year 2016, the number of banks that suffered heavy squandering will increase substantially.

Of course, part of the reasons for the dissipation of banks was the correction of the banks’ financial statements, but the high rate of bank interests with many fluctuations in the past few years since 2013 has kept its rate parallel to the inflation rate, which is in turn, one of the most important reasons for bank losses.

In financial statements, the total proceeds from the deposit, investment and concessional facilities of the banks are lower than the profit earned, but banks are paying the same profit interest rate because of financial constraints and because they are trying to attract more liquidity.

Failure to collect claims and the growth of suspicious claims and the impossibility of selling real estate are other reasons for decline in the profitability and banks’ losses.

In this regard, Mohammad Javad Sharifzadeh, an economic expert told Fars news agency: “During the 10th government (Mahmoud Ahmadinejad’s administration) there were many actions and many decisions made that caused a lot of challenges. One of these decisions was granting the establishment of a bank to people who did not have the qualifications and, incidentally, these people were politically not aligned with the administration at the time.

He said that the conditions of banks in the 11th government (Hassan Rouhani’s administration) deteriorated day by day, adding that although a large part of the problems were initiated in the previous government, it was expected that the 11th administration tries to stop the trend, given that the banks were heading into more crisis and the losses.

The regime’s economist, argued that despite the deteriorating conditions of the banks the Rouhani’s government, did not take action to resolve its problems, and added: Due to this inaction, the problems of banks aggravated during the 11th government and became a crisis.

Also, Sayed Bahaoddin Hosseini Hashemi, former CEO of the Bank of Saderat, while pointing out the reasons for these challenges in the banking system, said: “We have not had a history of bankruptcy in Iran, but by setting up private banks and expanding private banking, there is the risk of non-repayment of deposits in the banking system (in case of lack of borrowing from the central bank), and so far some unauthorized or established institutions have encountered these problems.

Source » ncr-iran

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