Military Banks Merger in Progress

EghtesadOnline: The merger of five banks and credit institutions -- affiliated to military forces – with the state-owned Bank Sepah is in progress with the major tasks completed, CEO of the bank said.

News ID: ۷۴۸۰۸۷

06 August 2019

Speaking to reporters on Monday about developments related to the merger, Mohammad Kazem Choqazardi said most of the shares of the five merging lenders have been transferred to Sepah.

According to media reports, 1.13 million people hold shares in the merging lenders, Financial Tribune reported.

The signboards of five merging entities will become a single board by the end of the this calendar year (March 2020), IRNA reported.

Central Bank of Iran in March officially announced on its website that five banks and credit institutions, namely Ansar Bank, Bank Hekmat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar Credit Institution will merge with the state-owned Bank Sepah.

The measure is a follow-up to earlier decisions by the Money and Credit Council – the main monetary decision-maker -- and the Supreme Council of Economic Coordination -- a body comprising heads of three branches of government created at the behest of the Leader Ayatollah Seyyed Ali Khamenei to help address economic issues.

Choqazardi said a Bank Sepah envoy is always present in meetings of the board of directors of the merging entities to monitor their activities related to the merging process.

“Their presence also helps in better evaluation of capabilities of merged banks,” he added.

Regarding financial records of merging banks, the official said most of their balance sheets are “good enough.”

24 Million Customers

Recent reports said 24 million customers have 2,150 trillion ($17.9 billion) in deposits with the five merging banks. Likewise, the lenders have given 1,300 trillion rials ($10.8 billion) in loans.

Commenting on the number of bank branches and employees after the merging process, he said, the number of Bank Sepah branches will rise from the present 1,600 to 4,500 by the time the merging process is over.

The figure is significant in that the total number of branches after the merger will be 1,000 over and above Bank Melli Iran branches, the country’s largest lender.

The CEO noted that the merger will transform “Bank Sepah into the biggest lender” in the country.

As for the future of the staff, Choqazardi assured the workers that the merger will not cause any disruption in their careers and their rights are guaranteed.

He said the number of staff will increase from the present 15,000 to 43,000 people.

He promised the young workers that they would be given high managerial posts and attributed the longevity of current managers to the long years (close to a century) that Bank Sepah is in existence.

On its official website, the bank is touted as the first Iranian bank established in 1925. Sepah is the poetic Persian translation for ‘army’.

Bank Reforms

Choqazardi recalled that merging these banks is now the most important banking initiative in the country and the merging process is the foremost priority of Bank Sepah.

He reiterated that merging five banks and credit institutions owned by the armed forces with Bank Sepah is part of attempts to revive the ailing banking sector.

“Merging banks and credit institutions with Sepah is in line with structural reforms of the banking sector and in the national interest.”

The CBI governor, Abdolnasser Hemmati, said earlier that the initiative is part of efforts to mobilize the capabilities and capacities of the merged institutions.