Ayandeh Bank Wants to Sell $3.5 Billion Iran Mall

EghtesadOnline: Ayandeh Bank, a leading private bank, plans to sell the giant Iran Mall complex in the capital Tehran in line with the legal mandate to relinquish non-banking activities.

News ID: ۷۵۱۷۰۰

13 December 2020

Iran Mall is a vast shopping and entertainment complex in northwest Tehran and was wholly financed by Ayandeh Bank.

The first phase of the mall opened in 2018 as a grand and the largest shopping center. The second phase is under construction and is slated to become one of the biggest in the world.

Ayandeh issued an auction notice last week that soon became a hot topic among the public, raising speculations about the lender’s possible insolvency and inability to meet its commitments to depositors.

The bank was compelled to post a press release on its website on Friday to explain its surprising decision and inform public opinion.

It referred to instructions from the Central Bank of Iran earlier this month for divesting non-financial assets, saying that it (Ayandeh) was only complying with a legal obligation.

"The decision was made in line with [new] banking policies to concentrate on professional banking and guarantee the rights of depositors," it said. The bank was apparently authorized to participate in the huge project by the Money and Credit Council, Iran’s financial decision-making body.

In early December, the CBI announced new guidelines for divesting non-financial assets of banks and credit institutions, based on which divestments should only be the function of auctions.

Banks and credit institutions are obliged to annually divest at least 33% of their non-financial assets over three years. Law also demands divestment of shares in listed companies and banks can use the earnings to boost capital.

Bourse Option Open

The lender pointed to previously announced plans to float shares of Iran Mall in the stock market, saying "The decision to hold the mall auction doesn't mean that efforts to offer shares at the bourse have ended.”

According to the bank’s press statement, Iran Mall is a financially successful project. It tried to reassure the public that the bank "owns other valuable assets that are a robust guarantee for customers’ deposits and their confidence.”

As per the auction notice, the plan calls for "divesting 100% shares" in the giant mall, which is estimated to be worth more than 850 trillion rials ($3.4 billion). An auction of this size is unprecedented in Iranian memory.

Founded in 2012, Ayandeh Bank was the outcome of a merger and acquisition in Iran’s banking industry. It was born after two credit institutions, Salehin Credit Institution and Ati Credit Institution, agreed to merge with Tat Bank.

The Banker, a globally-recognized source of financial intelligence, last week selected Ayandeh as the top Iranian lender for the Bank of the Year Awards in 2020.

It said Ayandeh was eligible for the reward because of its innovative banking services, efforts to create jobs as well as promote social responsibility in curbing the spread of Covid-19.

In March, the lender built a makeshift hospital inside Iran Mall to help treat coronavirus-infected patients as the disease spread and hospitals in the capital and most other cities were stretched thin.