Page 37 - IRANRptFeb21

8.1.5 ​Bank news
Fate of ‘$8.5bn owed to Iran but stuck in Korean banks depends on US election outcome’
State banks in Iran continue to cut costs by selling off branches surplus to requirements
Iran's frozen capital in South Korean banks amounts to $8.5bn and the release of the money “depends on the outcome of the US presidential election”, head of the Iran-South Korea Chamber of Commerce, Hossein Tanhaei, has reportedly said.
Speaking to the state-run Iran Labor News Agency (ILNA), Tanhaei claimed that negotiations between Tehran and Seoul to release the blocked funds—largely earned on past oil sales and which South Korea has declined to transfer given the threat of US sanctions—have failed so far, adding: "Both countries are waiting for the result of the US election."
Tanhaei also said that Iran had proposed a barter agreement to South Korea, with an initial focus on food and medicine deliveries and a gradual inclusion of “petrochemicals, home appliances and automobiles” in trade exchanges. Jahan-e-San'at​ newspaper reported on October 15 that due to US sanctions around $40bn of Iranian hard currency assets in countries around the world was frozen. Of that $20bn was said to be stuck in China.
Also according to its report, India owes Iran $7bn, South Korea $6bn, Iraq $2bn and Japan $1.5bn. Iran lately struck a barter deal with Baghdad focused on food and medicines to allow it to utilise the capital frozen in Iraq.
Tehran has previously threatened to sue South Korea over its capital frozen in Korean banks.
Before the reimposition of heavy US sanctions in 2018, South Korean annual exports to Iran were worth $4bn, while South Korea’s annual imports from Iran stood at $8bn, according to Radio Farda. South Korea's imports from Iran in the first half of the current Iranian calendar year (began March 20) were valued at a meagre $5mn, it added.
State-owned Iranian banks are continuing with cost-cutting strategies that hinge on shutting down high street banks viewed as surplus to requirements, according to an economy minstry report cited by ​Donya-e Eqtesad.​
Bank Melli Iran (MBI), Bank Mellat, Bank Sepah (sometimes wrongly associated with the Islamic Revolutionary Guard Corps, or IRGC) and Bank Tejarat (Trade Bank) are among those closing branches.
The state lenders have reportedly sold off branch assets for IRR280tn ($1.2bn at the free market exchange rate, but $6.7bn at the official rate) since January 2018 to private developers. The buildings are typically turned into restaurants or are torn down to make way for apartment complexes.
In the period stretching from the start of President Hassan Rouhani's first term in 2013 to the end of 2017, the state banks sold IRR135tn of commercial real estate assets, the report noted.
Successive governments in Iran have ​mounted increasing pressure​ over the years to force banks to divest all non-core assets, including companies that have come under their control following bankruptcies, impaired loans and bad debts.
Earlier in August, MBI announced it had divested non-core assets (commercial real estate and other assets) valued at IRR17.4tn ($102) in the previous Persian year (ended March 19).
Last November, MBI failed to find a buyer for the National Development Investment Company, which it listed as having a value of €1.4bn. The business appears to have a level of debt that makes it unattractive to buyers.
37​ IRAN Country Report February 2021 www.intellinews.com