Iranian Banks’ Foreign Assets Up 10%

According to the latest data published by the Central Bank of Iran on Sunday detailing Iran’s economic indicators up to Aug. 22, private banks and non-bank credit institutions account for the biggest share of financial institutions' foreign assets at 1.56 quadrillion rials ($40 billion).

These institutions owned 61.4% of the total figure, showing a growth of 6.7% compared with the previous year's figures.

The five state-owned specialized banks also experienced a 17.9% surge in their foreign assets year-on-year to reach 610.4 trillion rials ($15.65 billion), accounting for 24% of the total sum, Financial Tribune reported.

The smallest share of foreign assets pertains to three commercial state-owned banks at 371.4 trillion rials ($9.5 billion), which account for the remaining 14.6% of banking system’s total foreign assets.

This is while the Central Bank of Iran’s foreign assets also experienced a slight year-on-year growth of 3.1%. The value of CBI’s foreign assets exceeds 3.5 quadrillion rials ($89.74 billion), which is significantly bigger than the collective value of all Iranian banks’ foreign assets.

Deposits

The Iranian private sector's deposits in banks and non-bank financial institutions reached 13.32 quadrillion rials ($341.5 billion) by Aug. 22, marking a 25% growth year-on-year.

By the end of the month to Aug. 22, private lenders managed to collect about 9.36 quadrillion rials ($240 billion) from the private sector’s deposits that equal 70.27% of their total savings in the banking system. The private lenders' deposits registered a growth of 22% compared with last year’s same period.

This is while commercial state-owned banks and specialized banks have respectively attracted 2.63 quadrillion rials ($67.4 billion) and 1.31 quadrillion rials ($33.6 billion) worth of savings from the private sector to account for 19.79% and 8.9% of the total deposits.

The volume of deposits commercial state-owned banks and specialized banks attracted up to the end of the aforementioned period has also increased by 39.6% and 19.6%, respectively.

According to CBI data, the amount of term deposits grew by 26.2% compared with the previous year, whereas the figure recorded a 10.5% growth during the five months ending Aug. 22.

A year ago, long-term deposits accounted for 53% of the total term deposits, which kept the balance in its favor against short-term deposits over the past year. However, the figures gradually swapped places and now short-term deposits got the upperhand and accounted for 54% of term deposits.

The trend indicates a shift toward short-term deposits, possibly a fallout from the imposition of new caps on long-term interest rates that put investors in a dilemma, trying to figure out the investment with the most returns.

The lion’s share of deposits were in the form of non-sight deposits that accounted for 91% of the total volume at 12 quadrillion rials ($307.7 billion), up 26.1% YOY. Sight deposits absorbed only 1.3 quadrillion rials ($33.3 billion), constituting 9% of the total sum.

The total volume of banks’ reserve requirements in CBI also witnessed an annual growth of 22% and reached 1.4 quadrillion rials ($35.9 billion), as a result of the establishment of new banks and credit institutions, and the significant recapitalization of state-owned banks.

Liquidity  

By the end of the month to Aug. 22, money supply exceeded 13.6 quadrillion rials ($348.7 billion), up by 24.3% YOY, according to the CBI data.

The volume of monetary base and money in circulation grew by 26.1% and 12.4% respectively compared with the previous year.