The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Iran: Private banks still opening

The Iranian authorities’ recent granting of operating licences to two new private banks (Bank Sarmaye Daneshgah and Bank Pasargeda) suggests that the sector has a future, despite president Mahmoud Ahmadinejad’s apparent disdain for his predecessor’s reformist agenda.

By Lawrence White

He is reported to have said that much of Iran’s current financial predicament can be blamed on privately owned banks. “Had the banks trodden the path of the Islamic Revolution, very many of the country’s problems would have been resolved,” he said.

The president’s attacks on private banks have so far been more bombast than direct action. “There has been no obvious attempt to limit or attack the activities of private banks,” says Stephen Austen, CEO of Bahrain-based Future Bank, which is two-thirds funded by two Iranian banks. “A lot of people are jumping to conclusions about Iran these days,” he continues, “but the fourth five-year plan has not been changed in any way and all six private banks are continuing to develop.”

Ahmadinejad might lack the support he needs to ignore the privatizing intentions of the plan set out by former president Mohammad Khatami before the election. “My impression is that the current government has a different agenda,” says Philip Smith, senior director of financial institutions at Fitch Ratings, “but they lack the full backing of the clerical elite and would struggle to change the development plan.”

For now, while Iran’s sovereign rating remains on negative outlook and its political situation might be described as volatile, the private banks can take advantage of the fact that they are not subject to government-set constraints on interest rates by looking to increase their market share of deposits – whether they are encouraged to do so or not.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree