Page 45 - IRANRptAug22

Iran’s central bank ‘okays opening of offshore bank to serve Kish Island Free Trade Zone’
State banks in Iran continue to cut costs by selling off branches surplus to requirements
An offshore bank serving Iran’s Kish Island Free Trade Zone is to be opened following an approval granted by the Iranian central bank, according to the secretary of Iran's High Council of Free Trade Zones, as cited by ILNA.
"We have got permission from the central bank for launching Iran's first offshore bank on the island. The Central Bank of Iran has asked us to submit the list of shareholders of the bank," Saeid Mohammad was quoted as saying in an interview with the news agency.
A consortium of shareholders has been formed for the bank, but the names would not be published due to US economic sanctions and other restrictions, he was reported as adding.
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 ministry 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.
Other failed sales concern some retail bank branches in Tehran and elsewhere. MBI and other banks have attempted to dispose of them, but due to the ongoing inflationary effects of the severe devaluation of the Iranian rial, they have struggled to find buyers.
8.2 Central Bank policy
Iran, Russia agree to tighten banking, monetary cooperation
The Central Bank of Iran (CBI) and Central Bank of Russia (CBR) have signed a memorandum on interbank cooperation that outlines an expansion of banking and monetary collaboration, CBI governor Ali Salehabadi said on July 9.
Salehabadi met with Deputy Prime Minister of Russia Alexander Novak and CBR chief Elvira Nabiullina. They discussed moves necessary to remove obstacles to the use of bank payment cards issued in Russia within Iran and the use of Iranian payment cards in Russia as well as other issues including smoothing paths to joint investments to be made by Tehran with Moscow. Novak said that the development of economic and investment ties between
45 IRAN Country Report August 2022 www.intellinews.com