Iran declares major lender bankrupt

TEHRAN

Iran declared one of the country's largest private banks bankrupt with its assets absorbed by the state, official media reported on Oct. 25, in a rare move in the country grappling with international sanctions.

Founded in 2012, Ayandeh Bank had a network of 270 branches across the country, including 150 in the capital Tehran alone. But it had more recently been crippled by debt, with accumulated losses amounting to the equivalent of about $5.2 billion and roughly $2.9 billion in debts.

On Oct. 25, queues of customers could be seen outside a former Ayandeh Bank branch in Tehran, with police also present.

The state-owned Melli Bank has absorbed the assets of the now-defunct Ayandeh Bank, following a decision by the Central Bank, which has given assurances that depositors will be able to recover their savings.

An official at the Central Bank of Iran, Hamidreza Ghaniabadi, said "bad debts" had prompted the bankruptcy.

He told Iran's IRNA news agency that "more than 90 percent of Ayandeh Bank's funds were allocated either to parties related to the bank or to projects managed by the bank itself," which were never repaid.

Ayandeh Bank had been behind lavish projects such as the immense Iran Mall shopping complex in Tehran, which includes an ice rink and cinemas.

In addition to Ayandeh, five other banks -- Sarmayeh, Day, Sepah, Iran Zamin and Melal -- are also facing difficulty, according to Iran's Tasnim news agency.