Bank Sepah Allocated $11b From NDFI Forex Resources

EghtesadOnline: Bank Sepah allocated $11.17 billion from the National Development Fund of Iran's foreign exchange resources to bankroll major national projects in the last Iranian year (ended March 20, 2017).

News ID: ۷۷۸۷۵۹

26 August 2017

Mohammad Kazem Choghazardi, the bank's CEO, added that the resources were used for implementing macro projects such as Bid Boland II Gas Refinery, Saba Arvand Oil and Gas Development Company, Sarvak Azar Engineering and Development Company, Dana Kish Drilling Company, South Pars Gas Field Phase 12 (aka Kangan), Harris Combined Cycle Power Plant, Kaveh Arvand Steel Company and several other petrochemical projects in Firouzabad, Fasa, Jahrom and Darab.

"These resources did not include the bank's internal loans that were offered to various economic sectors in the country," Choghazardi was also quoted as saying by IBENA.

He noted that in the last fiscal year, Bank Sepah doled out $6.66 billion worth of loans to customers and opened letters of credit valued at over $3.3 billion, according to Financial Tribune.

"Bid Boland II Gas Refinery, which is the most important project of Iran's largest banking consortium consisting of Bank Sepah, Tejarat Bank, Bank Mellat, Parsian Bank and Bank of Industry and Mine, is being implemented through Bank Sepah's $1 billion letter of credit," Choghazardi added.

The Bid Boland II plant in Khuzestan Province would generate $750 million in annual profits after its establishment and earn $1.5 billion annually for the country in added value. The project was handed over to Persian Gulf Petrochemical Industries Company in 2015 and is slated to come on stream by 2018, but according to the company's managing director, wrapping up the plan needs at least $2.8 billion of investment.

The refinery is expected to produce 1 million tons of propane, 500,000 tons of butane, 1.5 million tons of ethane for ethylene production and 400,000 tons of liquefied petroleum gas per annum.

Choghazardi noted that NDFI has selected Bank Sepah as its agent bank to finance a wide variety of projects in different sectors like water, agriculture, industries, mining and tourism.

According to Bank Sepah's CEO, the volume of deals with NDFI exceeds 55 trillion rials ($1.4 billion) while loans worth more than 28 trillion rials ($737 million)were paid out during the previous fiscal year.

Growth in Lending Portfolio

Choghazardi noted that during the first four months of the new fiscal year (started March 21), Bank Sepah allocated a total of 52.7 trillion rials ($1.3 billion) as loans to different economic sectors.

"The number of allocated loans during the four-month period indicates a 74% leap compared to the previous year's corresponding period of time," he added.

The lion's share of the loans at 25 trillion rials ($658 million) went to industries and mines, as the sector accounted for 48% of all the offered credits.

Loans for trade and agricultural sectors respectively stood at 16.8 trillion rials ($442 million) and 4.5 trillion rials ($118.4 million). Services and housing sectors also bagged 3.8 trillion rials ($100 million) and 3.4 trillion rials ($89.4 million) in loans respectively.

"We have allocated more than 65% of all the loans to productive economic units," he said.

Choghazardi said that in the last Iranian year, Bank Sepah ranked second in terms of growth in loans, from among the five big Iranian commercial banks.