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EghtesadOnline: More than 22,630.7 trillion rials ($191 billion) in deposits were held by banks and credit institutions during the month to August 22, according to a Central Bank of Iran report.

Total value of bank deposits increased by 4,869.3 trillion rials ($40.57 billion) over previous figures, indicating a 27.4% growth compared to the corresponding month last year. 

The report also indicated 9.5% increase in bank deposits compared to end of the last fiscal year (March 2019). The report covered deposits both in rials and foreign currency, according to Financial Tribune.

As usual, Tehran Province topped the list of provinces with the highest deposits with lenders in the capital parking more than 12,222.7 trillion rials ($101.85 billion) -- accounting for 53.91% of the total deposits.

Next on the list was Isfahan Province with  1,199.61 trillion rials ($9.99 billion). This was followed by Khorasan Razavi Province with 1,059.69 trillion rials ($8.83 billion).

At the bottom end of the list was Kohgilouyeh-Boyerahmad Province with 60.68 trillion rials ($505.71 million).

Outstanding Loans

The report said during the period under review, outstanding loans exceeded 16,089.3 trillion rials ($134 billion), indicating a 20.2% growth on year-on-year basis.

During the same period last year total outstanding loans reached 13,389.31 trillion rials ($111.6 billion).

Total outstanding loans grew 999.1 trillion rials ($8.32 billion), or 6.6% during the five-month period since the end of last fiscal year. 

Once again, Tehran took first place as the province with the highest number of loan defaults, crossing a total of 10,308.6 trillion rials ($85.9 billion). Isfahan Province was next with 594.61 trillion rials ($4.95 billion).

About 506.66 trillion rials ($4.22 billion) worth of unpaid loans were in banks in Khorasan Razavi province.

Likewise, with 56.8 trillion rials ($473.33 million) worth of outstanding loans, Kohgilouyeh-Boyerahmad Province was at the bottom end of the list.

According to the CBI, one of the main reasons for Tehran's top slot in both deposits and bad loans is that the sprawling metropolis is home to head offices of most businesses across the country. 

This gives rise to a whole lot of financial and banking requirements, including rising demand for loans, credit and other financial assistance.

 

Loan-to-Deposit Ratio

With a 4.9% annual decline, the loan-to-deposit ratio (LDR) stood at 79.3%, also indicating a 2% fall compared to the end of the last fiscal.

Likewise, the ratio for Tehran province was 93.2% and for Kohgilouyeh-Boyerahmad Province 105.5%.

LDR is used to assess a bank's liquidity by comparing the total loans to total deposits for a specific period and is expressed in percentage.

If the ratio is too high, the bank may not have enough liquidity to cover unforeseen fund requirements. Conversely, if the ratio is too low, the bank may not be earning as much as it should be.

 

Iran Central Bank of Iran Credit Institutions Banks deposits