EghtesadOnline: Bank Melli Iran is set to gradually shed its excess assets currently worth 27 trillion rials ($714 million) after the clearance of legal hurdles, BMI’s deputy for logistics announced.
“In the past three years, BMI has sold excess assets worth around 4.4 trillion rials ($116 million),” Abbas Shafiei was also quoted as saying by BMI’s website.
He added that due to the reigning recession in the property market, the scheme has hit some snags but “compared to other lenders, BMI has had a better record”.
Iranian lenders have been urged to minimize their non-banking activities and sell excess assets to raise capital since their botched investments in the real-estate market have caused them much pain in recent years, Financial Tribune reported.
According to Valiollah Seif, the Central Bank of Iran’s governor, a high portion of banking asset is frozen in the form of NPLs, non-banking ventures, non-credit real-estate investment and government arrears.
A company named Fam has been established in 2008 by the government to help banks sell their excess properties. It was born out of an agreement between the banking system and the Ministry of Economic Affairs and Finance.
Fam sold 120 properties valued at 500 billion rials ($13.2 million) in the Iranian fiscal year that ended in March 2016.
BMI also earlier sold a portion of its bullion in an auction that includes a limited edition of Bahar Azadi gold coins as part of an effort to sell its unwanted assets.
Shafiei pointed to the sale of foreclosed industrial and commercial properties as a major issue.
“The owner of these properties took out loans for economic ventures but then defaulted on their debt,” he said.
Shafiei noted that in line with Resistance Economy—the concept outlined by the Leader Ayatollah Seyyed Ali Khamenei to curb oil dependency and promote domestic production sector–BMI is ready to lease these properties to their owners.