iran-merging-military-linked-banks-to-stabilize-sector

Iran merging military-linked banks to stabilize sector

© Reuters. FILE PHOTO - To match Feature IRAQ-SANCTIONS/© Reuters. FILE PHOTO - To match Feature IRAQ-SANCTIONS/

DUBAI (Reuters) - Iran is merging four military-linked banks and another financial institution with the country's oldest bank to boost efficiency and help stabilize the sector, the central bank said on Saturday, as the economy reels under U.S. sanctions.

Many Iranian banks are under pressure because of years of poor management and economic difficulties, caused by decades of international sanctions and the reimposition of U.S. sanctions last year.

The merger would create "a stable and more efficient single bank to provide better services to the families of the armed forces and the general public", the central bank said in a statement quoted by state news agency IRNA.

Ansar, Mehr Eqtesad, Qavamin, and Hekmat banks and the Kosar credit institution will be merged with state-run Bank Sepah, set up in 1925 by an army pension fund as Iran's first bank, the central bank statement said. It gave no further details of the merger or the institutions involved.

President Donald Trump reimposed U.S. sanctions last May after pulling out of the 2015 Iran nuclear deal. The sanctions have shaken the economy and pushed the currency to record lows, disrupting foreign trade and helping boost annual inflation fourfold to nearly 40 percent in November.

The weak currency and spiraling prices have been among complaints in sporadic street protests since late 2017.

Besides banks, Iran's armed forces and particularly the elite Revolutionary Guards control numerous companies.

After the Iran-Iraq war in the 1980s, the Guards became heavily involved in reconstruction, with interests subsequently expanding to take in a vast network of businesses ranging from oil and gas projects to construction and telecommunications.

Disclaimer: Fusion Media

would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.