EghtesadOnline: Bank Melli Iran–the country’s biggest commercial lender–is expanding its presence in neighboring Iraq by establishing new branches in its capital city Baghdad, the shrine city of Najaf and the southern city of Basra, the bank’s deputy for foreign exchange affairs announced.
“BMI’s customers and businesspeople can use services such as opening accounts and issuing payment orders and letters of credit in currencies other than the US dollar,” Gholamreza Panahi was also quoted as saying by the bank’s official website.
In April, Mohammad Reza Hosseinzadeh, the CEO of BMI, announced the plan to open a branch in the holy city of Karbala that is visited by many Iranian pilgrims throughout the year.
According to Abdol’al Al-Yasiri, the head of Iraq’s Consulting and Investment Center, Iran—as the third biggest trade partner of Iraq—exported $5 billion worth of goods to Iraq during the year to March 20, 2017, according to Financial Tribune.
Due to its important status in religious tourism, Seyyed Ali Qazi-Askar, the representative of Iran’s Leader for hajj and pilgrimage affairs, urged BMI to come up with a pilgrim credit card for Iranians, which could be used in Iraq and Saudi Arabia to increase financial safety.
Since the removal of nuclear-related sanctions last January, BMI has managed to establish 32 direct correspondent relations and 150 indirect ones with its global peers. The lender has also negotiated with 180 foreign counterparts to establish correspondent relations.
Hosseinzadeh also announced that BMI’s share of non-performing loans in the Iranian banking network has decreased to 9% during the three years to March 20, 2017, while it was 17% in August 2013.
According to the official, 46 trillion rials ($1.2 billion) of the total 130 trillion rials ($3.4 billion) worth of bad loans have been recovered by the bank during the three-year period.
BMI’s CEO noted that by the end of the previous fiscal year, BMI’s ratio of bad loans decreased by 1.2% year-on-year and reached 7.8% “while the average ratio of NPLs stands at 8.8% for the banking system”.
Hosseinzadeh concluded that in order to establish more banking ties with international counterparts, BMI plans to further reduce its bad loan ratio to approach the international standard, which is 3-5%.