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EghtesadOnline: After financial statements of Bank Melli Iran became public last week, the chief executive, Mohammad Reza Hosseinzadeh, responded to criticism and defended the performance of the lender.

In a note seen on the BMI website, Hosseinzadeh took stock of the monumental funding obligations imposed on the bank by the state and government for years. He urged economists and financial experts to be fair in their views and analysis.

He tied the multi-billion losses reported in the BMI financial report to “decisions and policies of successive governments in which the CEOs barely had a role.”

Recalling some of the government decrees, he pointed to imposed banking fees that are paltry and simply unable to cover the lenders’ expenses. More importantly, the CEOs of banks have zero role in setting interest rates on loans and deposits. 

The senior banker pointed to the “unanticipated decision in fiscal 2017-18 when the Central Bank of Iran raised interest rates by 5% to curb money supply and control the chaotic gold and currency markets”. 

“At that time, the CEOs objected to the decision” to no avail, he said, adding that the decision inflicted the biggest loss on BMI, as the largest state lender and with the biggest amount in deposits.

“In other words, the CBI harmed banks only to control the currency market,” he claimed.  

Hosseinzadeh recalled that the BMI has an obligation to help meet the government’s need for liquidity for megaprojects, including development of infrastructure as well as providing aid during natural disasters. 

In addition, offer banking services in less privileged regions has placed further financial burden on the state lender now sinking in red ink. 

The banker criticized the government’s inability in repaying its debts to state-owned banks while it reimbursed its debts to three semi-private banks last year.  

Data published by the Central Bank of Iran show government and state-owned companies’ debts to banks stood at 6,475.6 trillion rials ($23.4 billion) by end of the previous quarter on June 21, indicating 45% increase compared to the corresponding period last year.

Financial reports of the BMI have revealed disappointing details about its performance.  The bank reported 675.23 trillion rials ($2.5 billion) in accumulated losses in fiscal 2020-21. 

The loss is about 73% of the lender’s capital, which make it eligible for bankruptcy, according to data published on, an information website for financial reports of listed companies. 

Despite imposition of unending financial burden on the bank by the government, the banker said BMI has strived to improve its balance sheets. 

The lender, he said, managed to cut operational expenses by closing branches and cutting workforce. The number of branches declined by 6% to 2,771 in the last fiscal year compared to the year before. Likewise, the number of employees was down 4.3% to 30,981 people in one year. 

The bank was successful in recovering unpaid loans with non-performing loans ratio dropping 7% to 5.34.  In addition the lender increased capital adequacy ratio by 40% last year.  


bank BMI Mohammad Reza Hosseinzadeh