EghtesadOnline: Eghtesad Novin Bank, also known as EN Bank, put some of its nonfinancial assets on sale becoming the first private lender to tap the capital market for surrendering assets.
The bank placed a notice on the Iran Mercantile Exchange website advertising auctions for two commercial properties in Kerman Province and a piece of land in Bandar Abbas Province.
Properties in Kerman Province are priced at 48.5 billion rials and buyers have to pay 3% to be able to participate in the auction. Price of land in Bandar Abbas is 185.8 billion rials
IME’s public relations office said on its website “EN bank is the first in divesting assets via the capital market [and] comply with legal obligations”.
The Economy Ministry launched a mechanism through the IME in January based on which lenders can put up their assets for sale in an electronic auction. The online system tracks surplus assets owned by banks and credit institutions.
The system carries data on lenders’ nonfinancial assets worth 170 trillion rials ($740 million). More specifically, the system logs data of 18 banks, private and state-owned, to help improve transparency about the value of assets and inform public opinion about the details.
Selling nonfinancial assets are in line with obligations announced by the government requiring banks to give up non-bank operations and focus on their original mandate, namely lending to manufactures and businesses.
The government wants lenders to concentrate mainly on funding the production sector rather than owning or managing companies, and in some cases involvement in the lucrative, but controversial, housing sector.
Banks and credit institutions are said to own 1,000 trillion rials ($4.3 billion) in nonfinancial assets, which have piled up over the years due to impaired loans, bad debts, settlement of government debts to banks, branch closures and failed investments.
Economy Minister Farhad Dejpasand earlier spoke about a one-year program based on which government-owned banks are required to relinquish their nonfinancial assets.