Tehran, Iran – Authorities have merged one in all Iran’s largest personal lenders into the nation’s largest state-run financial institution in a transfer that highlights a deeply troubled financial system and can additional squeeze common residents as pressure from the West grows.
The central financial institution on Thursday introduced that Ayandeh Financial institution, privately owned by one in all Iran’s wealthiest households, can be dissolved and merged with Financial institution Melli, the government-run nationwide financial institution, and that Ayandeh branches throughout the nation can be remodeled into Financial institution Melli branches by Sunday.
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Clients have been informed their accounts and deposits are secure, and all contracts stay below the identical circumstances. However after years of murky operations and central financial institution interventions, Ayandeh had racked up losses on a scale that impacted Iran’s macroeconomics, so its bailout is not going to go away Iranians unscathed.
How did we get right here?
Ayandeh started amid a disaster within the 2010s attributable to corruption and lack of regulatory supervision over the ailing banking system, consultants informed Al Jazeera, at a time when Iran was reeling from United Nations sanctions over its nuclear programme.
That was when a whole bunch of unlicensed monetary establishments linked with parastatal, navy, or non secular foundations mushroomed throughout the nation.
They provided exorbitant rates of interest to draw money away from the banks, and didn’t repay the deposits in lots of situations, leaving 1000’s of buyers unable to withdraw their deposits for years.
The federal government and the central financial institution lastly took over and accomplished the method of outlawing the unlicensed establishments by 2017, a 12 months after they managed to take management of over 25 % of the nation’s total cash provide.
The establishments had little of their coffers after being taken over as a consequence of loans to insiders and cash sunk into property.
A lot of the skyrocketing debt accrued by the establishments needed to be recuperated by printing cash, which meant rising inflation and increased costs of living for common Iranians.
Ayandeh was established in 2013 through the merger of Tat Financial institution with two state-linked monetary entities, the Salehin Credit score Establishment and Aatee Credit score Establishment.
Ali Ansari, the 63-year-old enterprise tycoon whose household is believed to be among the many wealthiest in Iran, was the founding father of each Ayandeh and Tat, and owned a majority of the shares in each monetary establishments together with members of the family and shut associates.
Ansari has been behind gigantic actual property tasks, owns ventures in metal, telecommunications and hospitality, and sat on the board of Tehran’s Esteghlal soccer membership, amongst different enterprise and influence-growing actions.
Simply how massive are the numbers?
The financial institution has been the topic of state consideration for years.
Two years in the past, as Ayandeh racked up losses and more cash needed to be printed, the central financial institution revoked shareholder voting rights on greater than 60 % of the corporate’s inventory and gave it to the Ministry of Financial Affairs and Finance.
However that didn’t assist, and the financial institution stored borrowing from the central financial institution and the federal government to remain afloat.
By the point of Ayandeh’s compelled dissolution final week, the central financial institution mentioned the lender had an eyewatering 5 quadrillion rials ($4.67bn utilizing the present open market change fee) in debt, and held 2.5 quadrillion rials ($2.34bn) in folks’s deposits.
Ayandeh was legally allowed to dole out as much as 200 trillion rials ($187m) in loans primarily based on its confirmed capital, however the central financial institution mentioned the lender paid about 10 occasions that quantity to people and entities through the years.
As much as 1.3 quadrillion rials ($1.21bn) was given to a small variety of people and companies straight linked with Ayandeh and its inside tasks, in keeping with the central financial institution. Authorities have refused to disclose the identities of the folks and entities who took the cash.
Iranians on-line have additionally been broadly reacting to information of Ayandeh’s chapter. Personal sector businessman Pedram Soltani was amongst those that known as for accountability.
لیست وامها و تسهیلات معوق و مشکوکالوصول و داراییهای سمی #بانک_آینده را منتشر کنید!
مردم باید بدانند هزینه چه کسانی بر جیبشان تحمیل شده است.— Pedram Soltani (@PedramSoltani1) October 24, 2025
Translation: Publish the record of overdue and doubtful-to-return loans and poisonous belongings of Ayandeh Financial institution! Folks should know whose prices have been imposed on their pockets.
A lot of the loans paid by Ayandeh have been overdue for a 12 months or longer and are thought-about unlikely to be recovered.
Bijan Khajehpour, an economist and a managing companion at Eurasian Nexus Companions consulting agency, identified that each one Iranian banks have a big quantity of non-performing loans (NPL) of their books.
“These NPLs are a consequence of loans having been prolonged to clients with out the due strategy of assessing their collateral primarily based on corrupt transactions between networks of energy,” he informed Al Jazeera.
“It says rather a lot in regards to the extent of corruption and the way political patronage undermines enterprise actions.”
Ayandeh was singlehandedly chargeable for an unbelievable 42 % of all overdrafts made by banks from the central financial institution, and 41 % of all capital imbalance within the beleaguered Iranian banking sector, in keeping with the central financial institution.
It had a capital adequacy ratio (CAR) of minus 600 %, whereas a financial institution will need to have a naked minimal ratio of 8 % below Basel II worldwide requirements which might be additionally accepted by Iran.
Its elimination raises the typical CAR of Iran’s banking business from 1.36 % to about 5 %.
Ayandeh will not be an remoted case; it merely underscores the systemic woes of Iran’s globally remoted monetary sector.
No less than 5 different banks, together with state-run Financial institution Sepah, which in 2020 had 5 different sinking banks merged into it within the largest banking consolidation in Iran’s historical past, are flagged by the central financial institution as being extremely imbalanced.
Corruption, political infighting
The announcement on Ayandeh’s dissolution got here in the future after Iran’s judiciary chief, ultraconservative cleric Gholamhossein Mohseni-Ejei, straight threatened Central Financial institution of Iran Governor Mohammad-Reza Farzin with authorized motion.
“Mr Farzin, you’ve enough authorized mandate to make any resolution about Ayandeh Financial institution. Do your authorized obligation or else we are going to are available in and improve prices for you,” he wrote in a put up on X.
Ejei mentioned that regardless of the central financial institution’s involvement in working Ayandeh for seven years – appointing and dismissing the board of administrators and the CEO – the financial institution’s collected losses elevated by as much as tenfold in that point.
No arrests or indictments, or another type of authorized reproach, have been introduced by the judiciary regardless of the billions of {dollars} in losses.
Together with the judiciary, hardline politicians with the Paydari Entrance – who’ve been entrenching power in the parliament, the Islamic Revolutionary Guard Corps (IRGC), and state media – have constantly been probably the most vocal critics of the personal financial institution.
Along with scoring factors for showing to be anti-corruption, the hardliners opposed the financial institution to discredit political and economic rivals within the technocratic camp affiliated with reformists who’re in favour of liberalising the Iranian financial system and opening it as much as the West.
Parliament speaker and former IRGC commander Mohammad Bagher Ghalibaf hailed Ayandeh’s dissolution as “an excellent success for the nation’s decision-making and governance system” in a press release on Saturday.
How Iranians will find yourself paying the value
Ayandeh’s downfall additionally places its belongings, lots of them in the true property sector, below full state management, however they are going to be troublesome and time-consuming to promote.
The central financial institution has emphasised that someway, all the belongings however “not one of the imbalances” of Ayandeh will probably be transferred to Financial institution Melli and to compensate for among the losses, Ayandeh’s belongings will probably be managed and offered, wherever attainable, by Melli.
The crown jewel of the belongings is Iran Mall, the most important mall on this planet by way of complete constructed ground space, situated in western Tehran.
The Deposit Assure Fund, which insures financial institution deposits as much as a ceiling below the central financial institution’s auspices, must foot a fraction of the invoice as effectively.
The central financial institution says Ayandeh’s prime shareholders must account for among the cash, however it stays unclear how a lot, by what time and precisely in what kind they must pay.
Nevertheless, because of the giant quantity of collected losses, Iranian media estimate that in an optimistic situation, the state and Financial institution Melli must account for about two-thirds of the debt.
A part of that must be executed by means of printing more cash, which itself has lengthy been recognized as a essential driver of inflation in Iran, at present at over 40 percent amid reinstated UN sanctions and constantly among the many highest on this planet over a long time.
In easy phrases, tens of hundreds of thousands of Iranians pays the value over the approaching months and years within the type of decreased buying energy.
Home items have already seen one other main value leap within the aftermath of the 12-day war with Israel and the US in June, with meals gadgets like hen, pink meat, eggs and peas experiencing the sharpest will increase.
For his half, Ayandeh’s Ansari mentioned in a press release on Friday that the chapter got here “on account of selections and insurance policies that have been made exterior the financial institution’s management”, including that the financial institution has left behind “useful legacies and lasting belongings”.
Ansari added “my conscience is comfortable and my coronary heart is assured”, and mentioned he had devoted all his power to service and to the general public good.
