Iranian bank faces $838.5M losses

Business Materials 11 December 2016 11:58 (UTC +04:00)

Baku, Azerbaijan, Dec. 11

By Fatih Karimov – Trend:

Bank Saderat Iran has faced 27 trillion rials ($838.5 million) of losses during the first half of the current fiscal year (started March 20, 2016), Mehr news agency reported Dec. 11.

This is while the bank gained 4.2 trillion rials of profit during the same period of preceding year.

Bank Saderat, one of the largest Iranian state-owned bank, enjoys a banking network over 2,500 branches, including foreign branches and regional offices. The bank listed by the EU on July 26, 2010 as an entity linked to Iran's proliferation-sensitive nuclear activities or Iran's development of nuclear weapon delivery systems. The EU sanctions expired on October 23, 2016.

It should be noted that over the past year, at least two times Iranian banks have announced downward revisions on deposit interest rates.

The first downward revision came in early 2016 when the banks decreased the interest rates on deposits to 18 percent from 20 percent.

Later in June, banks again announced that they are going to cut down interest rates to 15 percent, following the government’s breakthrough in tackling inflation as its rate dropped to single digits (9.5 percent) for the first time in a quarter century.

The decision on decreasing interest rates carried further implications as rumors about financial losses at 14 Iranian banks got around, blamed on lower interest rates.