Iran: Bank Mellat plans to sell 20% stake in Asia Insurance

Source: Middle East Insurance Review | Jan 2018

Bank Mellat is planning to sell its 20% stake in Asia Insurance as part of plans to shed excess or non-banking assets, and streamline operations.

Mellat Financial Group which controls the shares, has taken preliminary measures to sell them, Bank Mellat’s CEO Mohammad Bigdeli said, according to a report in Financial Tribune. He said that this is currently the top priority of the semi-private lender.

“Bank Mellat has sold and ceded 350 surplus properties and projects in the first eight months of the current Iranian fiscal to November 2017,” he said. The divestment process was started in 2016, but picked up pace in the current fiscal year.

The move is in line with the guidelines of President Hassan Rouhani and the strict order of Economy Minister Masoud Karbasian, as well as a directive of the Central Bank of Iran (CBI) which urges lenders to reduce their non-banking activities.

In the past decade, Iran’s biggest banks invested heavily in commercial entities beyond their traditional turf which, following the housing crash of 2013, increased their problems. CBI issued a decree in 2014, directing that the banking system’s investment in non-banking assets should not exceed 40% of their total capital. M

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