Page 40 - IRANRptNov21

Companies across the board in Iran suffered significant losses during the Iranian calendar year, with the severe US-sanctions-triggered depreciation of the rial against hard currencies and other market impacts of the sanctions making life very tough for the business world.
The CBI said in its annual report on the performance of the country’s banks that the services sector received IRR3,285tn, or 34%, of the awarded loans. The industries and mining sector was the next biggest beneficiary, accounting for IRR3,172tn, while companies in commerce received 19% of the total. Looking at loan amounts and destinations, the CBI said companies in services received an average $5,300 at the free market exchange rate, while the average for other sectors was $3,000.
8.1.3 Deposits
Iran’s sight deposits grow at whopping 90.7% annualised rate
Sight deposits placed with Iranian banks grew at a whopping annualised rate of 90.7% in the first half of the Persian calendar year (March 20- September 21), far outstripping term deposits, the Tehran Times has reported.
With money supply in Iran expanding at a tremendous speed, the soaring use of sight deposits reflected people’s reluctance to keep money in banks for extended periods as they anticipate prices will rise at a higher rate than the interest rates on offer from local banks, it added.
Total sight deposits rose by Iranian rial (IRR) 2,572.5 trillion ($8.7bn at the official rate, $61bn at the free market rate) in the first half period to reach IRR5,407.4 trillion and were up 47.7% during the six months in question, according to a cited Central Bank of Iran (CBI) monthly report.
8.1.4 NPLs
CBI gives Iran’s NPL rate as 10%
The Central Bank of Iran (CBI) calculates that Iran’s overall bad debt now stands at 10% of the total debt market in the country, according to a late May Iranian Banker Journal report.
Around IRR1 trillion of bad debt existed in Iran; however other figures suggest the figure of non-performing loans is higher, with banks struggling to retrieve assets due to old-fashioned regulations which mean it takes a very long time to clear debts.
Iran’s overall NPL figure stood at 18%, according to prior CBI statistical releases. The reason behind the supposed improvement in NPL clearance is the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
8.1.5 Bank news
US court rejects Turkish Halkbank’s bid to dismiss indictment for assisting Iran in sanctions evasion
A US appeals court on October 22 rejected Turkish state lender Halkbank's bid to dismiss an indictment accusing the bank of assisting Iran in the evasion of American sanctions.
The 2nd US Circuit Court of Appeals ruled that even if the Foreign Sovereign Immunities Act shielded the bank, the charge against Halkbank fell under the commercial activity exception, Reuters reported. Turkish President Recep Tayyip Erdogan was implicated in the alleged sanctions-busting conspiracy at the heart of the case during a trial that resulted in the conviction of a top Halkbank executive, but he strenuously denied the claims made against him.
40 IRAN Country Report November 2021 www.intellinews.com