TEHRAN – Iran’s Deputy Finance and Economic Affairs Minister Abbas Me’marnejad says Iranian banks and their subsidiaries are going to sell one quadrillion rials (about $23.8 billion) worth of properties and shares in the current Iranian calendar year (started on March 20).

According to Me’marnejad, the banking system has offered 70 trillion rials (about $1.7 billion) worth of shares in the country’s stock market over the past 1.5 months as part of a plan to reform the country’s banking sector, IRIB reported.

The first large bank offering will be announced next week by Omid Investment Group, a subsidiary of Sepah Bank, and it’s valued at more than 700 trillion rials (about $16.6 billion).

The deputy minister noted that the value of government shares that are being transferred through exchange-traded funds (ETFs) has currently doubled.

Tehran Stock Exchange (TSE), which is the main stock exchange of Iran, listed the first exchange-traded fund (ETF) from a series of three ETFs on May 2.

The shares to be offered via the above mentioned Iranian ETFs belong to those governmental bodies defined in Iran’s privatization program, a comprehensive plan seriously followed up by the government to downsize and reduce its role in the economy.

Back in October 2019, Finance and Economic Affairs Minister Farhad Dejpasand announced that a one-year program is underway for 10 government-owned banks (including the biggest lenders) to relinquish the excess assets- mostly real estate- and increase their cash reserves.

Speaking in a meeting with the managing directors of the government-owned banks, he noted that the ministry will follow up on the provided solutions in the program through relevant authorities until it reaches a conclusion.

Iran’s banking industry is suffering, among other things, from issues such as poor balance sheets, capital inadequacy, inability to recover non-performing loans to the tune of billions of dollars, arcane rules, and dubious operations of illegal credit institutions that have been punishing the economy for years.

In late August 2019, Governor of Central Bank of Iran (CBI) Abdolnasser Hemmati said the bank has been working hard to reform the banking system long grappling with mismanagement and financial indiscipline.

EF/MA