Banks of Iran: Six pieces of an Iranian jigsaw

Chris Wright
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Iran has a heavily populated and complex banking sector, with several large state-owned banks that hold most of the country’s assets and deposits and at least 17 privately owned banks that tend to be smaller but more nimble and entrepreneurial. Euromoney profiles six institutions that represent different parts of the picture.

Bank Melli Iran

The first national Iranian bank, established by parliament in 1928 and still state-owned today. Until 1960, it served as the country’s central bank, printing and distributing rials. A pioneer in international banking from Iran – it opened in Hamburg in 1965 and still has 16 branches and subsidiary banks internationally – it is today the biggest bank in Iran, employing over 43,000 people in 3,300 branches across the country.

Although not at any international level of transparency and efficiency – the most recent annual report available on its English-language web site is from 2008/09 – the bank is more than just a big state institution, with a large share of the country’s private-sector deposits alongside the government banking, project and trade finance work. However, it does appear to have been saddled with the worst of Iran’s troubling bad-debt problem. In May, Iran’s central bank chief, Valiollah Seif, quoted by the semi-official Isna news agency, said bad debts had reached 15.6% of total bank loans in Iran; the Hamshahri newspaper reported that in 2013, Melli held $12 billion (35%) of all those bad loans.