Page 33 - IRANRptSep18

Iran’s EDBI signs €10bn refinancing deal with Moscow-based Mir Business Bank
German rating agency grades Iran’s Bank Saderat Tashkent at ‘B’
The Export Development Bank of Iran (EDBI) and Moscow’s Mir Business Bank have signed a €10bn short-term refinancing deal to boost Russian exports to Iran during US sanctions, Islamic Republic News Agency reported on August 5. The EDBI is the sole import-export bank in Iran. It has been given the key responsibility in boosting Iran’s international banking relations with regional partners in light of the US sanctions retriggered on August 6. While Mir Business Bank is the sole Iranian financial institution based in Moscow, it has been hit by US sanctions in the past and mostly shuttered operations in 2013.
EDBI Russian financing will help Iran to pay for imports of staple goods, medical equipment and raw materials needed by production units. EDBI will pay a 2.5% interest rate on the facilities to Mir Business Bank, according to the agreement.
As part of the deal, payments to EDBI will be restricted to deliveries from Russia and other member states of the Commonwealth of Independent States (CIS) and exports from these countries should be destined only for Iran.
Iran’s only Uzbekistan-based financial institution, Bank Saderat Tashkent (BST), has been awarded a credit rating of ‘B’ Frankfurt-based Agentur Expert said on August 3, Uz Daily reported.
BSI’s operations are concentrated 100% in Uzbekistan, while the bank’s funding base is concentrated 100% in Iran. The banking system risk (BSR) of Uzbekistan and Iran is high. The agency also reported that the overall systemic risk of Bank Saderat Tashkent was assessed as high.
It noted that the creditworthiness of the bank remains constrained by the adverse macro profile, low competitive position and high captivity levels.
It further noted profitability figures are below the Uzbek market average for resident banks in Uzbekistan and the exposure to foreign exchange risk, currently mitigated, could potentially harm the stance of the bank in case there is UZS appreciation.
"Profitability at the bank remains subdued as the ROE figure posted by the bank in 2017 was 5% as compared to a market average of 17.1%, Agentur Expert added. Moreover, most of the increase in profit in 2017 was due to the extreme devaluation of the UZS against the USD back in September 2017, it said.
8.2 Central Bank policy
Iran’s central bank permits lenders to take forex deposits with monthly interest that it guarantees
The Central Bank of Iran (CBI) is permitting lenders to take deposits of foreign currencies including the euro, dollar and Emirati dirham in return for interest that it guarantees, IBENA has reported.
The CBI is attempting to steer savers’ privately held foreign currency holdings into the country’s banking system by green-lighting generous interest rates. “[Iranian] banks will be permitted to take foreign exchange reserves in euro, Emirati dirham and the US dollar with returns of 3%, 2% and 4%, backed by a CBI guarantee,” a CBI statement, put out on August 25, said.
The maturity of the savings accounts backed by the CBI is to be 12 months, with savers able to extend it beyond that period. Banks are allowed to take a 0.3% fee on the total value of the deposit.
“Payment of interest to depositors will be on a monthly basis,” the CBI added in a memo to the banks.
33 IRAN Country Report September 2018 www.intellinews.com