EghtesadOnline: The plan to merge five military-affiliated banks and credit institutions has entered the next phase after majority ownership of the merging entities was transferred to state-run Bank Sepah, CEO of the bank said.
Mohammad Kazem Choqazardi said the merging process is progressing as planned, pointing to the ownership transfer as the main phase of the major merger.
“About 70% of the merged banks’ shares have been transferred to Bank Sepah and the bank now owns the main portion of shares”, ISNA quoted him as saying.
“Transferring ownership shares of merging banks to Bank Sepah was the key issue as this would enable the bank to enforce its ownership right and managerial role,” Financial Tribune quoted him as saying.
According to media reports, people hold 1.13 million small shares of the merged lenders.
In line with efforts to reform the ailing banking sector and improve transparency in the banking system, the Central Bank of Iran in March announced the merger of Ansar Bank, Bank Hekmat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar Credit Institution - five apparently loss-making money institutions affiliated to military organizations - with the state-owned Bank Sepah.
The merger has been billed as a crucial monetary undertaking in the past five decades. It is a follow-up to earlier decisions by the Money and Credit Council – the main monetary decision- maker -- and the Supreme Council of Economic Coordination -- an ad-hoc decision-making body comprising heads of the three branches of government.
The CBI governor, Abdolnasser Hemmati, said earlier that the move is part of efforts to mobilize the capabilities and capacities of the merged institutions.
As the next step, Choqazardi outlined plans to make changes in the composition of board of directors of the merging banks in the upcoming general assembly meetings.
“We plan to make changes in the board of directors depending on needs and requirements,” he said, adding that new directors will be selected in an extraordinary general meeting.
According to Choqazardi, a Bank Sepah envoy is present in all the meetings of the board(s) of the merging banks to monitor work related to the merging process.
In the final phase, the signboards of merging entities will become one board by the end of this calendar year (March 2020).
To demonstrate Bank Sepah’s ownership to the people and banks’ customers, Sepah has made some small changes to the signboards of merging banks.
Over the past month the term ‘Affiliated to Bank Sepah’ is inserted at the bottom of merging banks’ signboards.
Jump in Nr of Branches
The CEO noted earlier that the merger will transform Bank Sepah into “the biggest lender” in Iran. By the time the merging process is over the number of Bank Sepah branches will rise from the present 1,600 to 4,500
Merging banks have a total of 2,800 branches which will be added to the existing branches of Sepah. The figure is significant in that the total number of branches after the merger will be 1,000 over and above Bank Melli Iran branches, the country’s largest and most prominent lender.
Reports have said 24 million customers have 2,150 trillion ($17.9 billion) in deposits with the five merging banks. Likewise, the lenders have given 1,300 trillion rials ($10.8 billion) in loans.
The number of Bank Sepah personnel will increase from the present 15,000 to 43,000 people.
Choqazardi assured the staff working for the merging banks that the merger will not cause any disruption in their career and their rights have been guaranteed.