Page 42 - IRANRptJul22

Iran’s banks ‘lent IRR9,750 trillion to businesses in 2019-2020 Persian year’
The industrial and mining branches of Iran received more than IRR5.502 quadrillion (around $20.6bn) in working capital loans, 36.2% of the total.
In its latest reporting on loans flowing into the economy, the central bank emphasised that inflation, officially running at around 42%, needed bringing under control.
Iran’s banks lent Iranian rial (IRR) 9,750 trillion ($62.9bn at the free market rate, $232bn at the official rate) to businesses in the 2019-2020 Persian year (ended March 19), marking a rise of IRR2,012tn or 26% y/y, according to Central Bank of Iran (CBI) data published by DEN Group on April 30.
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.
42 IRAN Country Report July 2022 www.intellinews.com