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Last year’s award for best bank transformation honoured Al Ahli Bank of Kuwait, a bank that showed great ambition by acquiring a financial institution larger than itself – the Egyptian division of Greek bank Piraeus. By so doing it became an international player in Middle Eastern banking.
This year’s award goes to a bank that achieved something altogether different: the successful merger of multiple struggling financial institutions in a single country. The winner is Iran’s Ayandeh Bank, a bank born of the fusion of three financial institutions and 10 credit cooperatives. As Euromoney noted at the time of its creation, few bank mergers anywhere in the world have been more ambitious than the one that created Ayandeh.
While Ayandeh’s creation dates back to 2013, only now can we confidently say that it has achieved its goal of taking a dozen dysfunctional businesses, combining them with Tat Bank, and making them into a successful whole. It takes time to assess whether or not such a radical form of financial engineering has worked, especially in Iran where accurate information about the banking community can be patchy and where such a merger had never happened before.
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Jalal Rasoulof, Ayandeh |
Ayandeh’s turnaround owes much to the efforts of its CEO, Jalal Rasoulof, a well-regarded member of Iranian’s banking community, who, before Ayandeh, also transformed two other Iranian banks – Agricultural Bank and EN Bank. Now Ayandeh is the largest private bank by total deposits, with a 15% market share, and the third largest by loans, with a 14% market share. At 4.2%, its non-performing loan ratio seems well under control.
Its income growth rate remains stellar – at 237% over the past year – admittedly from a far lower base than its main competitors, which are growing much more slowly.
Although it does not yet qualify as the best bank in Iran, Ayandeh has made a strong impression over the last few years, showing that bank mergers are possible in Iran and that they can deliver on their promise.
