January 22, 2021
Iran has completed the merger of six lenders linked to the military, a move designed to curb the security forces’ role in the economy and shore up the country’s financial industry.
The oldest and biggest of the banks, state-run Sepah Bank, will take over Ansar Bank, Mehr Eqtesad Bank, Hekmat Bank, Ghavamin Bank and the Kosar Credit Institution, the governor of the Central Bank of Iran, Abdolnasser Hemmati, said in a statement December 20.
The merger has made Bank Sepah the largest bank in the country with 4.7 quadrillion rials in deposits, which is also 50 percent more than Bank Melli, previously the largest bank,
Plans for the merger were first announced in March 2019 as part of efforts to improve transparency and regulation and tackle a high volume of bad loans.
With the economy under strain after the re-imposition of US sanctions, the merger is a step forward for President Rohani’s efforts to bring Iran’s banks in line with international standards—and to reduce the military’s footprint on the industry.
The Central Bank has also been calling for a number of lenders to merge with healthier ones to clean up the industry.