In a rare and dramatic move, Iran has declared one of its largest private financial institutions, Ayandeh Bank, bankrupt, with its assets absorbed by the state-owned Melli Bank, AFP reported.
The announcement, made Saturday by Iranian state media, comes as the Islamic Republic continues to reel under the weight of renewed international sanctions and economic mismanagement.
Founded in 2012, Ayandeh Bank operated a vast network of 270 branches across Iran, including 150 in Tehran. However, the bank was crippled by staggering financial losses - reportedly $5.2 billion in accumulated losses and $2.9 billion in debt - according to Iran’s ISNA news agency.
Melli Bank director Abolfazl Najarzadeh confirmed on state television that “the transfer from Ayandeh Bank to Melli Bank is now complete.” The Central Bank of Iran has attempted to reassure the public, promising that depositors will be able to recover their savings.
The collapse of the bank comes just weeks after the United Nations reimposed sweeping sanctions on Iran in September, following the breakdown of nuclear negotiations.
The sanctions were reimposed thanks to the E3 - Britain, France, and Germany - triggering the snapback mechanism as part of the 2015 nuclear deal between Iran and world powers.