• Samba 65 00% 56.65%
    Joga2002 635.254 50% 63.63%
    Bra52 69 23.145% -63.25%
    Joga2002 635.254 50% 63.63%
  • HangSang20 370 400% -20%
    NasDaq4 33 00% 36%
    S&P5002 60 50% 10%
    HangSang20 370 400% -20%
    Dow17 56.23 41.89% -2.635%

EghtesadOnline: The recent bank merger of five banks and credit institutions linked to the military forces with the state-owned Bank Sepah has turned the latter into the biggest bank in Iran.

The megamerger elevated Sepah in terms of total deposits, branches and payroll leaving behind the Bank Melli Iran, another top state-owned lender, according to Farhad Hanifi, the Central Bank of Iran vice governor for supervisory affairs. 

The merger was finalized on Dec. 20 after an arduous two and a half years. It involved Bank Sepah, the oldest in Iran and one of the three still under government ownership, four banks and one credit institution owned by the Iranian armed forces, namely Ansar Bank, Bank Hekamat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar Credit Institution.

After the merging process was complete, Hanifi said,  Sepah now holds approximately 4,700 trillion rials ($18.8 billion) in deposits, which is almost 50% higher than the Bank Melli's deposits, the CBI public relations office reported.  

In addition, the Sepah staff increased from 15,000 to nearly 50,000 employees. Hanifi said the employees resumed work under Sepah's management after the merger without any hassles.   

Regarding branches, the five along with Bank Sepah had a total of 4,800 branches, the senior banker said, stressing that plans are underway to cut the number. 

"Before the merger, each merging entity agreed to cut branches by 10%," Hanifi said, adding that Sepah will start reducing the branches. 

Taking stock of the large number of Sepah branches post-merger, Mohammad Kazem Choqazardi, Bank Sepah CEO, said his bank will have to reduce the number of branches to be able to optimize and perform efficiently.   

Sepah is planning to cut branches to 3,500 in three years but insists that this “does not necessarily mean layoffs”.

Pointing to the anticipated increase in Bank Sepah branches after the merger, Abbas Memarnejad, a deputy economy minister, said the bank can move “extra branches” from big cities to smaller urban areas. 

“The Ministry of Economy has prepared a list of cities with populations over 10,000 that lack banks to where   Sepah can move the surplus branches,” Memarnejad said. 



According to Hanifi, the merger idea was brought up for the first time in 2014 but was launched in 2019 as part of  CBI policy to streamline the dysfunctional banking industry, promote transparency and improve efficiency.

The merged banks reportedly suffered from weak balance sheets due to involvement in unhealthy competition with peers and violating CBI rules governing lending and interest rates. 

Hanfi said during the merging process the five agreed to streamline their activities and abide by rules announced by the monetary policymakers, namely the CBI and Money and Credit Council. 

The merger is billed as a crucial monetary move in the past half century and was a follow-up to decisions by the MCC-- 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 Merger started in May when the five held their final general assembly. Hekamat Iranian was the first to do so in May and was followed by Mehr Eghtesad Bank a month later.  Earlier this month Kowsar Credit Institution and Ghavamin Bank completed the process and Ansar Bank was the last.


Bank Sepah lender Sepah