Banks Lagging Behind AGM Schedule
EghtesadOnline: More than a month has passed since the July 22 deadline set for Iran’s banks and credit institutions to finalize their financial statements and hold their annual general meetings, but only a handful have managed this feat.
According to a report by Fars News website, from a total of 19 banks and two credit institutions listed in the capital market, only Ansar Bank, Karafarin Bank and Middle East Bank have managed to hold their annual general meetings.
According to the report, Hekmat Iranian, Saman, Pasargad, Dey, Shahr, Qarzol-Hasaneh Resalat, Mehr Eqtesad, Eqtesad Novin, Sarmayeh and Iran Zamin are the bourse-listed banks that have failed to finalize and publish their audited financial statements. As a result, they are unable to hold their meetings.
Kosar and Melal are two credit institutions with similar conditions, according to Financial Tribune.
On the other hand, Saderat, Tejarat, Mellat, Ayandeh, Parsian, Ansar, Karafarin and Middle East Bank have offered their finalized financial statements to the central bank and obtained the go-ahead to hold their meetings. From among these entities, the last three have held their meetings.
The problem is that banks have to devise their balance sheets in accordance with the International Financial Reporting Standards-based template prepared by the central bank and first released in February 2017.
CBI in July 2017 released another directive emphasizing that banks and credit institutions must avoid releasing conflicting financial statements for an accounting period. It also considered it vital for banks and credit institutions’ independent auditors to only consider financial statements that are compatible with CBI’s framework, avoiding any vague conditional articles that are hard to understand for shareholders and users.
Banks have had problems finalizing their balance sheets and holding their annual general meetings ever since the IFRS-based templates were notified. A disagreement between the central bank and the Audit Organization last year over who gets to set the balance sheet standards also delayed the process for months.
After that dispute was resolved in mid-2017, the banks were expected to hold their meetings on time. However, it seems that structural problems and lingering deficiencies in lenders’ balance sheets continue to prove a major obstacle.
Iranian banks and credit institutions have long suffered from an array of major issues, including but not limited to a huge credit crunch, a very high ratio of non-performing loans and weak conformity to international standards.