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ANNUAL REPORT 2010/11 ANNUAL REPORT 2010/11
1 ANNUAL REPORT 2010/11 CONTENTS
OVERVIEW ...... 5 FIVE-YEAR SUMMARY...... 6 FINANCIAL HIGHLIGHTS...... 7 CEO MESSAGE...... 8 CORPORATE PROFILE...... 10 HISTORY...... 11 BUSINESS MODEL...... 12 VISION, MISSION AND OBJECTIVES...... 13 OUR STRATEGY...... 14 SAMAN FINANCIAL GROUP ...... 16 SHAREHOLDER STRUCTURE AND CAPITAL...... 18
BUSINESS REVIEW...... 19 OVERVIEW ...... 20 RETAIL AND ELECTRONIC BANKING...... 22 INVESTMENT PRODUCTS AND SERVICES...... 25 INTERNATIONAL BANKING...... 26 LENDING...... 28
GOVERNANCE...... 37 CORPORATE GOVERNANCE ...... 38 BOARD OF DIRECTORS...... 42 BOARD COMMITTEES...... 44 INTERNAL AUDIT AND CONTROL...... 46 INDEPENDENT AUDIT...... 47 EXECUTIVE MANAGEMENT...... 48 RISK MANAGEMENT...... 51 COMPLIANCE...... 54 HUMAN RESOURCES...... 56
CORPORATE SOCIAL RESPONSIBILITY. . . 61
FINANCIAL STATEMENTS...... 67
SAMAN BANK BRANCH NETWORK. . . . . 99
3 ANNUAL REPORT 2010/11 OVERVIEW
5 ANNUAL REPORT 2010/11 OVERVIEW
FIVE-YEAR SUMMARY
for the years ended March 21 US$ m Change in % in IRR billion, except where indicated 2011 2011 2010 11/10 2009 2008 2007 Profit and loss data Total income 894 9,262 7,043 31.5 5,700 4,462 2,880 Total expenses 747 7,747 6,164 25.7 5,237 3,950 2,621 Profit before tax 146 1,515 879 72.4 463 512 259 Tax 15 160 92 73.9 24 0 0 Net profit 131 1,355 787 72.2 439 512 258 Balance sheet data Total loans 5,813 60,246 34,184 76.2 27,341 23,989 15,269 Total assets 8,193 84,912 49,315 72.2 41,733 34,846 26,209 Total deposits 5,325 55,189 40,072 37.7 34,167 29,583 22,370 Total liabilities 7,727 80,081 46,393 72.6 39,341 33,320 24,954 Share capital 289 3,000 1,800 66.7 900 900 900 Total shareholders' equity 466 4,831 2,922 65.3 2,392 1,526 1,255 Capital measures Tier 1 capital 466 4,831 2,922 65.3 - - - Tier 2 capital 67 698 392 78.1 - - - Total capital 533 5,528 3,314 66.8 - - - Risk weighted assets 5,387 55,828 31,398 77.8 - - - Capital adequacy ratio - Basel I (%) - 9.90 10.56 - 9.97 7.36 7.96 Capital adequacy ratio - Basel II (%) - 19.47 18.61 - - - -
Change in % Key ratios (%) 2011 2010 11/10 2009 2008 2007 Cost to income ratio 83.64 87.52 - 91.88 88.53 91.01 Return on assets 2.02 1.73 - 1.15 1.68 1.28 Return on shareholders' equity 34.96 29.63 - 22.41 36.82 24.65
Change in % Share information 2011 2010 11/10 2009 2008 2007 Number of shares issued (millions) 3,000 1,800 66.7 900 900 900 Earnings per share (IRR) 452 437 3.4 488 569 287 Dividend per share (IRR) 383 350 9.4 400 400 200
Change in % Other information 2011 2010 11/10 2009 2008 2007 Employees 1,618 1,506 7.4 1,456 1,160 890 Customers 863,504 792,038 9.0 645,566 496,442 360,557 Branches 123 106 16.0 97 75 54
6 FINANCIAL HIGHLIGHTS
Figure 1 Figure 2 Figure 3 Total assets (IRR billion) Total income (IRR billion) Total liabilities (IRR billion)
84,912
9,262 80,081
49,315 7,043 5,700 41,733 46,393 34,846 4,462 39,341 26,209 33,320 2,880 24,954
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
Figure 4 Figure 5 Figure 6 Profit before tax (IRR billion) Earnings per share (IRR) Dividend per share (IRR)
400 400 1,515 383 569 350 488 437 452 879 200 287
512 463 259
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
Figure 7 Figure 8 Figure 9 Total shareholders’ equity (IRR billion) Return on shareholders’ equity (%) Return on assets (%)
4,831 36.82 34.96 2.02 29.63 1.68 1.73 2,922 24.65 22.41 1.28 2,392 1.15
1,526 1,255
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
7 ANNUAL REPORT 2010/11 OVERVIEW
CEO MESSAGE
Placing loyalty at the heart of our enterprise Welcome to the Saman Bank Annual Report 2010/11. This report covers the 12 months to March 20 2011 – a highly successful year that saw us increase our total income by almost 32% and our net profit by 72%. We also grew total loans by 76.2%, and deposits by close to 38%, increasing our return on assets by nearly 17% and return on shareholders’ equity by 18%. We made these achievements despite an ongoing investment programme that saw us expand our branch network from 106 to 123, our ATMs from 390 to 519, and our employee base from 1,506 to 1,618. The year also saw us gain a 25% share of the international market serviced by Iran’s leading six privately-owned banks, as we continued to strengthen our network of correspondent banks in close to 40 countries across the world.
A new strategic approach Results aside, this has also been one of the most important periods in Saman’s history, as we marked the first year of our second decade. During this year we devised and began to implement the new strategy that I and my board colleagues believe to be the right response to the challenges and opportunities we anticipate over the next five years. This strategy builds on our work of the last ten years, when we successfully carved out our own niche as one of the most successful and respected of the new Iranian banks. On this journey, our most productive focus was our pioneering approach to internet and electronic banking, an area in which we established a leadership position as ‘The Intelligent Bank’.
8 Skills, professionalism and commitment Priorities change as markets develop, however, and we have come to recognise that a positioning based exclusively on technology is vulnerable to competitor advancement. Indeed, in a maturing market place, we believe that the only truly unique and non-replicable source of competitive advantage must be based on the superior skills, commitment and professionalism of our people. These combine to deliver a consistently high-quality experience for customers, who are encouraged not only to remain loyal but also to act as advocates among their social and business networks. For us, this means redefining and expanding the meaning of ‘Intelligent’ to include all the positive attributes that our different customer groups are looking for. During the year, we started to develop the genuine customer focus that will enable us to achieve these goals. In doing so, we will fulfil our five-year strategic objective of becoming a bank that consistently delivers quality, speed, convenience and trust to promote customer loyalty and advocacy. Achieving this goal will not be easy. It means embedding a customer-focused attitude into our corporate culture and in every one of our employees, so that it is second nature to us all. This in turn means committing considerable resources to employee training to ensure that our customers receive a personal service that they appreciate and remember. If we can introduce this new focus across today’s 123-branch network in Iran, which is set to grow significantly in years to come, we will have an unbeatable proposition. While our people will be the lynchpin of our customer strategy, they will also be supported by the use of a new loyalty management tool which will enable us to identify and resolve any weaknesses in our dealings with customers. If we are to earn and deserve the trust and loyalty of our customers, we must also respond rapidly and ruthlessly to any instances of wrongdoing that we discover among our staff. This is something that is already underway, and we will continue to make every effort to ensure that our customers benefit from the scrupulous honesty of all our people, both at head office and throughout the branch network.
A positive impact We are still in very early days of our new strategic approach, but I believe that our work completed to date has already had a positive impact on our results from 2010/11 (see page 6 for details). These results confirm we are heading in the right direction and presage further progress in the years to come. I would like to thank my Board colleagues for their vision and rigour, and our employees for the enormous efforts they are making to ensure our continued success. Finally, I would like to thank our customers and our shareholders, first for choosing Saman Bank and particularly for staying loyal to us as we enter this new era.
Vali Zarrabieh President and CEO
9 ANNUAL REPORT 2010/11 OVERVIEW
CORPORATE PROFILE
Headquartered in Tehran, Saman Bank is one of Iran’s six leading privately-owned banks. It serves a diverse client-base of private retail customers, high net worth individuals and businesses via its 123-branch network across the country. Even in an increasingly competitive and regulated environment, Saman’s focused approach to becoming first choice for its target customers is successfully driving growth in market share and business volume. It held a 9.5% market share among Iran’s six leading privately-owned banks in 2010/11 (up from 8.6% in 2009/10) and a 2.16% share of the country’s entire banking industry, up from 1.92% in 2009/10. In 2010/11, Saman’s share capital stood at IRR 3,000 billion (US$289.46 million), up from IRR 1,800 billion (US$183.04 million) in 2009/10. Net profit, meanwhile, was up by 72%, driven by a 76% increase in total loans and a 38% growth in deposits. Its leading trade and import experience makes it an international top-performer, with US$3 billion in foreign business equating to 25% of the total international banking volume of Iran’s six leading privately-owned banks. Such a performance enabled an exceptional return on equity of 34.96% and a dividend per share of IRR 383 in 2010/11. Looking ahead, the bank intends to expand its current areas of specialism, which include trade and project finance expertise for industries including construction, mining and automotive, to further embrace areas such as food, medicine and pharmaceuticals. It will also introduce greater scope and quality of services through its growing branch network, supported by its five-year strategic focus on delivering exceptional customer service.
Saman Bank – key facts 2010/11 Employees 1,618 Total customers 863,504 Debit cards in issue 847,585 Internet banking customers 215,670 Telephone banking customers 209,694 Branches 123 ATMs 519 POS terminals 65,064
10 HISTORY
The Saman story dates back to September 1999, when it was launched as the Islamic Republic of Iran’s first credit institution, under the name of Saman Eghtesad, with a share capital of IRR 11 billion (US$1.4 million). Its success was immediate, with a 5% return on equity in its first year. Less than three years later, in August 2002, Saman had collected sufficient capital to be recognised by the Central Bank of Iran, becoming the nation’s third privately-owned financial institution to receive its banking licence. With around 20 times the original share capital, the newly formed Saman Bank had a clear goal – to provide private individuals and businesses with a range of banking services unhindered by red tape and bureaucracy. This has been Saman’s driving objective ever since. Over the years Saman Bank has steadily increased and upgraded the scope and quality of its offer, while pioneering solutions such as Iran’s first Internet and electronic banking services. Saman Bank’s determination throughout its lifetime to revolutionise the traditional Iranian banking system has seen it achieve many firsts, including: }} Iran’s first electronic bank }} The first Iranian bank to offer an internet banking service (2002) }} The first to provide online transfer and payments services in Iran
It is an approach that has provided a strong platform for growth, and today Saman is poised to extend its existing 123-branch network throughout Iran. It also has 86 correspondent banks across 36 countries. Looking ahead, Saman’s future direction is clear – to build on its values of convenience, speed and trust to create outstanding customer relationships in all its areas of operation.
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BUSINESS MODEL
Saman Bank uses a number of channels to generate its revenues and profit. First and foremost are the charges it makes for lending capital to its business and personal customers, primarily within its trade and project finance framework. It also charges transaction fees across a range of services, including interbank electronic funds transfer, credit card issue and transactions, credit scoring, guarantees and card purchases at point of sale. In addition, Saman Bank charges commission on its international banking services, including foreign exchange, letters of credit and international payments. In these aspects, Saman is similar to countless other banks across the world. However, Saman seeks to outperform its rivals through the excellent service levels that encourage customers to use more services and recommend them to others. Its ability to do this depends on a broad range of professional strengths, including those of its credit and international banking teams. But what really sets Saman apart is its attitude, based on enthusiastic staff working throughout an attractive branch network in genuine partnership with their clients. This attitude extends throughout the entire bank hierarchy to demonstrate the depth of Saman’s customer commitment and care. And it is the focus of a new five-year strategy that will strengthen the bank and its customer relationships even further.
12 VISION, MISSION AND OBJECTIVES
Saman Bank’s vision and mission underpin everything we do and drive our new five-year customer- focused strategy.
OUR VISION By applying its five-year customer-focused strategy, Saman Bank’s vision is to become: }} The first choice Iranian bank for its target customers }} The first choice correspondent banking partner for overseas banks }} The first choice employer for the best and brightest banking professionals }} The first choice privately-owned Iranian bank for international banking operations and transactions
OUR MISSION Saman aims to fulfil this vision by engendering outstanding levels of loyalty and advocacy. This will be achieved by providing the quality, convenience and speed that every customer wants; thereby delivering added value and generating trust.
OUR OBJECTIVES This vision and mission will help Saman pursue its declared five-year business objectives of: }} Building Saman’s customer acquisition and retention performance through a range of initiatives that inspire market-leading recommendation and loyalty levels }} Lowering costs by increasing the bank’s operational efficiency through process improvements }} Expanding and improving Saman’s investment and international banking capabilities }} Mitigating exposure to risk through enhanced corporate governance and operational management }} Maintaining and building Saman’s lead in delivering electronic banking services
13 ANNUAL REPORT 2010/11 OVERVIEW
OUR STRATEGY
In the financial year 2010/11, Saman Bank unveiled its new five-year strategy of using all the resources at its disposal – products, services, systems, properties and above all its people – to create exceptional levels of customer loyalty: loyalty that will lead to valuable ‘word of mouth’ advocacy and drive sustainable growth and profitability. Taking this step is the next stage in the growing maturity of the bank. Saman already has a strong record of innovation following its pioneering use of banking technology in the Iranian market place. But the next step is to extend its reputation as ‘The Intelligent Bank’ into other areas of service.
A new competitive environment Saman recognises that the technological lead it established in its early years has been gradually eroded by the arrival of new players, including other banks and software providers, as well as a growing technological challenge from older, more established banks. Alongside important legislative changes, including the privatisation of a number of formerly state- owned banks, these trends are creating a new competitive environment in Iran that Saman must respond to. Quite simply, it has recognised that advantage cannot be sustained by the acquisition and implementation of new technologies and solutions that are available to every competitor. As a result, Saman has sought a positioning that will give it a sustainable long-term advantage that cannot be replicated by existing or new competitors.
The power of positive emotion During the first half of the year, the bank identified the importance of positive emotion as a key discriminator for each of Saman’s main target customer categories – from its private retail customers, right through high net worth individuals and small businesses to major corporations. The value of this positioning was confirmed by in-depth customer research which indicated that for many, a pleasurable customer experience is of at least equal importance to competitive pricing. It also showed that corporate customers are more likely to select a service provider based on logic. This leads to an overall positioning where excellence in speed, product range and convenience needs to be supported by a banking relationship that delivers emotional satisfaction – a unique advantage in the Iranian banking market. As a result, the new approach was approved by the Bank’s Strategy Committee and Board. This has led to a major communications and training programme encompassing all Saman’s people and every aspect of its operations.
14 The human touch The objective of this new approach is clear – to ensure that Saman’s future competitive advantage resides in its corporate and organisational culture, not in any specific technology, product or service. To ensure the best possible outcomes, Saman and its people need to understand the attributes that each customer segment values the most in their relationships with the bank. This in turn is driving the bank’s next evolutionary step, affecting the working practices and behaviour of all employees. In short, it has to be second nature for them to respond to the requirements of every customer in the most honest, engaging and human way they can.
The bank of choice It is by delivering on every one of its customer commitments that Saman plans to become the clear bank of choice for all its target customers over the next five years. This will be the key that helps it achieve its business objectives, on time and within budget.
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SAMAN FINANCIAL GROUP
As well as Saman Bank itself, the Saman Financial Group includes a further six partly-owned subsidiary companies it launched, or in which it acquired a stake, between 2003 and 2007. Today these entities operate independently to provide specific services to the bank, its clients and to the wider market place.
Saman Kish Electronic Payment Company (Saman Bank shareholding: 48%, or 86,400,000 shares) Founded in July 2003 with capital of IRR 100 billion, Saman Kish Electronic Payment Company is responsible for Saman Bank’s key customer-facing electronic systems, including ATMs, self-service kiosks, e-commerce and POS solutions. As the first provider of online payment services in the country, it played a key role in establishing the leadership position in electronic banking that Saman Bank enjoyed during its first decade in operation. In 2010/11, it achieved profits of IRR 11,458 million on revenues of IRR 146,928 million.
Saman Satellite Communications Group (Saman SCG) (Saman Bank shareholding: 64.81% or 35,000,000 shares) Established in 2005 with capital of IRR 500 million, Saman SCG provides high-quality telecommunications and other satellite-based services to households and businesses throughout Iran. In 2010/11, its IRR 82,974 million in revenues generated profits of IRR 15,022 million.
Saman Exchange (Saman Bank shareholding: 71%, or 3,550,000 shares) Saman Exchange was founded in 2004 on share capital of IRR 50 billion to provide a full range of foreign exchange and international payment services. It was the first foreign exchange company to be registered in the country as a subsidiary of a privately-owned bank. In 2010/11, it delivered profits of IRR 2,087 million on revenues of IRR 5,930,397 million.
16 Saman Insurance Company (Saman Bank shareholding: 10.03%, or 28,074,900 shares) Saman Insurance started operations in 2005 with share capital of IRR 200 billion. Today, the company focuses on providing travel, fire, engineering, transportation and life and group accident insurance. In 2010/11, its IRR 840,785 million in revenues drove profits of IRR 96,110 million.
Saman Brokerage (Saman Bank shareholding: 49%, or 4,899,800 shares) Originally the first brokerage firm in Iran, the Krishchi Brokerage Company (registered in 1993) was renamed Saman Brokerage Company in 2004 when Saman Bank purchased 49% of its shares. Today it provides a wide range of brokerage, underwriting and consultancy services, including futures trading, portfolio management and investment advisory services. Its revenues of IRR 6,934 million during the second half of the 2010/11 financial year generated profits of IRR 3,422 million.
Iranian Credit Bureau & Scoring Company (Saman Bank shareholding: 98%, or 4,900,000 shares) Iranian Credit Bureau & Scoring Company was created in 2007 with share capital of IRR 100 million. Its remit is to provide credit scoring services to major banks and financial institutions under licence from Experian. The company and its operations are still under development.
17 ANNUAL REPORT 2010/11 OVERVIEW
SHAREHOLDER STRUCTURE AND CAPITAL
Figure 10 | Shareholder structure
41%
59%
Private individuals Legal entities
Figure 11 | Share capital (IRR billion)
3,000
1,800
900 750 600 300 200 220
2003 2004 2005 2005 2006 2007 2010 2011
18 BUSINESS REVIEW
19 ANNUAL REPORT 2010/11 BUSINESS REVIEW
OVERVIEW
As part of its new customer-focused strategy, which aims to make it the bank of choice for its target clients, Saman has organised its customers into three main categories. These are targeted with the strategic services that best meet their researched needs. ‘Retail customers’ are private individuals and businesses who require general retail deposit and credit services. According to research, the priorities they value the most are effective customer orientation, speed of service and a good range of retail banking products. Saman is working to provide them with a wider range of electronic banking products and services that reduce their need to visit branches. ‘Premier customers’ are small businesses and well-off individuals who are seeking a fast and convenient service that recognises their special requirements. As a result, the bank is concentrating its efforts on raising service quality among this group. ‘VIP customers’ are corporations and very wealthy private clients with complex banking needs. These customers require a full portfolio of answers they can access quickly and easily. The bank is focusing on streamlining its processes to offer seamless provision to this group. The bank provides a comprehensive range of resources that might be expected from a competitive modern provider to individuals and businesses under four main categories: retail and electronic banking, investment products and services, international banking and lending. Outlook for 2011/12 includes implementation of a major change in the bank’s organisational structure from a functional organisation to a customer-focused one, as part of ongoing developments in line with its new five-year strategy. This will help Saman better tailor its services to its various customer categories and will include the addition of corporate banking and private banking services to its existing service offerings.
20 VIP CLIENT SERVICES – MEETING THE NEEDS OF WEALTHY INDIVIDUALS
It was during the financial year 2010/11 that Saman Bank founded its portfolio of VIP “They have great Client Services as part of its five-year strategic plan to focus more closely on the specific customer relations, needs of its different customer audiences. with friendly staff The key unifying factor for all VIP clients is their high net worth, irrespective of whether who set Saman Bank their wealth is derived from business activity, inheritance or other sources, such as apart from many of personal investments. While those active in business naturally require a range of other premium services from Saman, the bank’s VIP asset management, investment consulting its competitors in Iran. and deposit services meet a key need for the great majority of them. Personal wealth That kind of attitude management services are also currently under development. is very important to According to the Head of VIP Client Services, “One key benefit for VIP customers is me, and it’s matched the fully confidential and secure environment in which all consultations – arranged by by the effectiveness of appointment only – take place.” Another feature that many find useful is the client- senior management matching service, which helps them find like-minded individuals for potential joint in attracting and ventures and other business partnerships. keeping customers. One client, who has made his fortune through setting up and selling fully-equipped Saman is certainly factories, places a great deal of confidence in the new service. As he says, “Today, when my bank of choice.” investing, the first thing I always do is consult with Saman’s VIP Client Services. They’re real problem solvers with an incredibly positive attitude and are fully committed to - VIP Client ensuring that their clients avoid making investment mistakes. I trust the financial advice Saman Bank VIP they give me.” Client Services This client, who has worked with Saman Bank since it was founded, finds that the positive aspects of the bank spill over into the new portfolio: “They have great customer relations, with friendly staff who set Saman Bank apart from many of its competitors in Iran. That kind of attitude is very important to me, and it’s matched by the effectiveness of senior management in attracting and keeping customers. Saman is certainly my bank of choice.”
21 ANNUAL REPORT 2010/11 BUSINESS REVIEW
RETAIL AND ELECTRONIC BANKING
During the financial year 2010/11, Saman Bank’s retail banking operations continued the significant expansion that has been underway ever since launch. The opening of 17 new branches, for example, saw the network rise to 123, while the installation of close to 130 strategically-sited ATMs (to total 519) demonstrated the bank’s ongoing commitment to ensuring convenience for its customers. Total deposits, including savings accounts and the bank’s range of one-to-five year time deposits, rose by more than IRR 15,000 billion to IRR 55,189 billion, while the number of Saman debit cards in circulation increased by over 40% to 847,585. This now equates to nearly one debit card per bank customer, which by the end of the year totalled 863,504 (up from 792,038 a year earlier).
Figure 12 | Customers
863,504 792,038 645,566 496,442 360,557
2007 2008 2009 2010 2011
Consistent growth in customer numbers is driven by the expansion of the branch and ATM network alongside Saman’s lead in electronic banking.
22 Figure 13 | Branches Figure 14 | ATMs
123 106 97 519
75 390
54 256 183 107
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
The steady growth of the branch network ensures Saman’s ATM installation programme adds that Saman Bank is in constant control of its significantly year-on-year to the number of expansion strategy. transactions its customers can undertake.
Figure 15 | Total deposits (IRR billion) Figure 16 | Debit cards
55,189 847,585
40,072 606,814 34,167 29,583 462,154 22,370 331,912 213,033
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
Growth in deposits taken accelerated in 2010/11 to Debit card uptake in Iran has grown rapidly over the reflect more accurately increasing customer numbers last five years, and Saman has enjoyed its share of following steady growth from 2006/07 to 2010/11. that growth.
23 ANNUAL REPORT 2010/11 BUSINESS REVIEW
Electronic banking, which includes internet and telephone banking, was another key area of growth for Saman during the year, building on the period of intense investment in this area when Saman was the primary pioneer in Iran. During the financial year 2010/11, users of the internet-based service rose by over 60,000 to 215,670, while only slightly fewer new telephone users joined Saman (up by almost 60,000 to 209,694). Advanced internet-based services offered by the bank include online funds transfer and bill payment.
Figure 17 | Internet banking users Figure 18 | Telephone banking users
215,670 209,694
154,382 149,898
103,270 105,452
48,089 53,153 12,185 20,013
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
Saman’s focus on electronic banking has driven Ten-fold growth in telephone banking customers a more than 17-fold growth in internet customer over the last five years is significantly ahead of the numbers over the last five years. Iranian market average.
24 INVESTMENT PRODUCTS AND SERVICES
The Saman Bank Investments Division was founded in 2008 primarily to provide high net worth and VIP clients with a range of investment advisory services. In 2008 the bank launched the Saman Bank investment portfolio, which today includes a total of eight mutual and fixed income funds, ranked among the top Iranian funds. The portfolio has shown steady growth since launch, reaching IRR 1,434 billion by the end of 2010/11.
Figure 19 | Saman Bank investment portfolio
85.18% Shares Fixed income securities Receivables Cash & near cash
14.30%
0.34% 0.18%
Figure 20 | Saman Bank investment portfolio performance against the TSE* index (%)
150.00
112.50
75.00
37.50
0
-37.50
Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11
Saman Bank investment portfolio TSE index Risk-free interest rate
25 ANNUAL REPORT 2010/11 BUSINESS REVIEW
INTERNATIONAL BANKING
As stated elsewhere in this report, international banking is a primary focus for Saman Bank as it progresses its customer service strategy up until 2015/16. Using its financial strength and high levels of technical knowledge, the bank provides a complete portfolio of international services that meet the needs of importers and exporters across a growing range of industries and sectors. Equally important is Saman’s international network of correspondent banks – 86 in 36 countries – that gives customers access to a host of international banking services. And at home, 89 of the 123 branches that comprise Saman Bank’s domestic network were offering foreign exchange services by the end of the financial year 2010/11, using the secure SWIFT interbank communications platform. Taken together, this critical mix of services and infrastructure helped to drive significant growth in Saman’s international banking activities during the year, positioning it as the undisputed leader among Iran’s six leading privately-owned banks with 25% of their total international business volumes. This was up from 13% in 2009/10, with growth in almost every service – led by export letters of credit (up by 935% over 2009/10) and incoming international payments (up by 343%). Saman also achieved the clear number one ranking in documentary collections (up by 94%). These results are testimony to the bank’s investments in the technical capabilities of its people and the resources of its branch network. Saman Bank now believes that, once the full benefits of its new five-year customer strategy are being experienced, positive word of mouth will drive further growth in international banking.
Figure 21 | International banking volume increase (%)
935
343
211
94 27
-13 Incoming Outgoing Documentary Letters of Export Import international international collections guarantee letters of letters of payments payments credit credit Saman Bank experienced significant growth in international banking activities during 2010/11.
26 Figure 22 | Import letters of credit Figure 23 | Export letters of credit Figure 24 | Documentary collections
3,104 2,991
1,590 1,242 1,085 1,174 974 1,446
511 408 560 120 167 355 48 17 73 289
2009 2010 2011 2009 2010 2011 2009 2010 2011
Number Volume US$ m Number Volume US$ m Number Volume US$ m
The increasing value of individual During 2010/11, the total value of Following some decline in 2009/10, transactions saw the total value of export letters of credit issued by Saman Bank re-established its import letters of credit grow by 211% Saman Bank grew by an extraordinary role in documentary collections in during 2010/11, even though the 935%. This followed growth of 2010/11. Customers commissioning number of transactions only grew 605% in 2009/10, emphasising the this valuable service, which is central from 1,085 to 1,174. This suggests bank’s continued fast-growing role in to the ongoing success of their that Saman Bank is gaining greater supporting Iran’s exporters. business, are expressing their faith in credibility among its customers who the bank’s operations. are increasingly prepared to entrust it with high-value business.
Figure 25 | Letters of guarantee Figure 26 | Outgoing international payments Figure 27 | Incoming international payments
19,902 95 18,154 5,647 16,785 4,770 4,700 60 62 3,704 54 7,600 4,940 6,000 20 23 1,060 475
2009 2010 2011 2009 2010 2011 2009 2010 2011
Number Volume US$ m Number Volume US$ m Number Volume US$ m
Saman Bank saw a 13% decline Outgoing international payments A 343% surge in the volume of in the total volume of international totalled US$7.6 billion in 2010/11, incoming international payments, letters of guarantee during 2010/11. up by 27% over 2009/10 and alongside a decline in the number This is, however, a valuable customer representing Saman Bank’s highest- of actual transactions, shows that service, enabling business to be value area of international business. Iran’s exporters are using Saman conducted with prospects that would Despite this growth in volume, the Bank to support increasingly not otherwise deal with them, and is number of transactions showed valuable transactions. expected to return to growth in time. a slight decline – suggesting that importers are using the bank to fulfil larger deals than in the past.
27 ANNUAL REPORT 2010/11 BUSINESS REVIEW
“When I look at how we perform as compared to other banks, we have a clear lead in terms of speed, quality of service and overall understanding of and empathy with client needs.”
- Project Finance Officer Saman Bank
LENDING
During the financial year 2010/11, Saman made loans worth a total of IRR 33,977 billion to businesses and private individuals, up from IRR 29,885 billion a year earlier. The bank uses speed and quality of service in its lending and business finance activities to differentiate itself from competitors. This is because the portfolio of available lending products differs little from one Iranian bank to the next, with similar lending limits and target sectors. The majority of Iranian bank lending is provided to finance business activities. Non-business loans at all banks are largely restricted to small-scale activities, such as home renovations and the purchase of cars and other goods. This makes the business finance market sector highly competitive. It is Saman’s belief that those banks that demonstrate the best understanding and commitment to their customers will win and retain more business than their competitors.
The regulatory environment The stringent guidelines laid down in the Central Bank of Iran’s monetary and credit policies are the primary cause of the close alignment of lending activities among the country’s banks. These determine in great detail the types of activities that banks may undertake and the products and services they may offer. They also govern the systems and processes involved, from review and approval criteria to documentation and lending limits. For these reasons, Saman believes that the positive attitude and approach of its people make a direct contribution to its commercial performance in the lending arena, underlining the fundamental importance of its customer-focused strategy up to 2015/16.
28 Focus sectors Saman Bank’s lending portfolio covers five main sectors that represent the majority of its lending business, as follows: }} Manufacturing and mining }} Building and construction }} Trade }} Services }} Agriculture
Figure 28 | Lending portfolio (%)
10.61% 39.36% Manufacturing & mining Building & construction
Trade 34.30% Services
15.30% Agriculture
0.42%
Saman’s lending portfolio is shared across five main industry sectors, as shown here.
Trade finance and working capital Saman Bank offers a suite of trade finance and working capital solutions to give corporations the liquidity they need to buy items ranging from stock or raw materials to machinery, equipment and even full production lines, or cover operating expenses. These solutions include revolving lines of credit, which are most suitable for established businesses and are often used in conjunction with import letters of credit to help purchase items that have to be bought from outside Iran. Other associated services that Saman provides include the issue of letters of guarantee, documentary collections, invoice discounting and forfeiting. Saman Bank customers in this area range from small companies to major engineering, procurement and construction (EPC) contractors and national industry leaders. Business industries range from consumer goods, food and pharmaceuticals, through to agriculture and manufacturing. However, most of the bank’s trade finance resources are dedicated to imports. Saman Bank can also underwrite trade and service agreements through the provision of various types of guarantees, including tender, performance and advance payment.
29 ANNUAL REPORT 2010/11 BUSINESS REVIEW
Project finance Saman offers project finance solutions to individuals and businesses by entering into a partnership agreement with the borrower, under which the two parties share the risks and rewards. These solutions are used to finance projects that create assets with a fixed value, such as general construction, factories, new production lines and more. In the manufacturing and mining sector, the bank supports textile and auto parts companies as well as steel and power plants. It is also active in mining for decorative stone – a key sub-sector of the Iranian economy, and an area in which Iran is a world leader. Companies and individuals undertaking building and construction projects represent an important part of Saman Bank’s client base. Due to the low risk of return involved, Saman lends a sizeable proportion of its project finance resources to support such projects. Recent ventures that the bank has supported include office and residential developments, and commercial developments such as shopping centres and hotels. In 2010/11, the project finance limit for individuals was IRR 30 billion. For companies, it was IRR 650 billion – above this limit Saman will invite other banks to participate in a syndicated loan. Saman took part in no syndicated loans during 2010/11.
30 Figure 29 | Loans granted
33,977 31,446 29,885 26,370
20,114 16,106
2009 2010 2011
Number Volume US$ m
The number and volume of loans granted by Saman has grown steadily in recent years.
Figure 30 | Total loans (IRR billion) Figure 31 | Total loans - growth (%)
76.24 60,246
34,184 27,341 25.03 13.97
2009 2010 2011 2009 2010 2011
Year-on-year increases in lending are driving significant growth in each year’s total of loans outstanding.
Figure 32 | Guarantees
4,985 4,386
3,058 2,056 1,651 745
2009 2010 2011
Number Volume US$ m
Growth in the average value of guarantees issued levelled off in 2010/11, following a sharp increase in the total volume of guarantees issued the previous year.
31 ANNUAL REPORT 2010/11 BUSINESS REVIEW
PARTNERSHIP IS KEY TO MEETING COMMERCIAL AMBITIONS
“Our partnership with Saman Bank has supported Abedi Machinery for over a decade, helping it to grow Saman, who provided and strengthen its position as Iran’s only privately-owned manufacturer of compressed us with a third of the natural gas (CNG) cylinders. The company is widely recognised for the exceptional quality and safety of its products. funding we required, has been a key factor According to the company owner and Managing Director, the bank’s single most in realising the new important recent contribution has been to help finance a brand-new CNG cylinder production line with a 105 IRR billion facility, including an international credit line CNG production line.” worth €2 million. - Managing Director As he says, “Our partnership with Saman, who provided us with a third of the funding Abedi Machinery we required, has been a key factor in realising the new CNG production line.” This investment is critical for the company’s future as it grows its production volumes to attract a larger proportion of Iran’s annual demand for CNG cylinders. As Abedi Machinery’s owner continues, however, Saman’s contribution extends far beyond this recent support. “Saman has also stood by us during some hard times in the past,” he says, emphasising the importance to any growing business of the bank’s commitment to partnership. According to the manager of Saman’s Africa branch, “We’re particularly pleased to be associated with Abedi Machinery, because of its enlightened approach to business. It’s a growing employer that looks after its people exceptionally well, with a particular focus on female empowerment. What’s more, CNG is a less polluting product than many other fossil fuels, so it is particularly pleasing that in Abedi we have a company that not only helps the environment but that also reduces Iran’s reliance on imported goods.”
32 “We have a responsibility to our business customers to support them during difficult economic times; when we enter a financing agreement with a business, we effectively become their partner.”
- Chairman of the Board of Directors Saman Bank
33 ANNUAL REPORT 2010/11 BUSINESS REVIEW
34 SUPPORTING A YOUNG COMPANY IN AN ANCIENT BUSINESS
With the support of Saman Bank, a company established in 2009 is helping to sustain Iran’s leading position in the global decorative stone market (the country ranks fourth “Knowing that we after only China, India and Italy). have the support and Marmarit Golrokh Fars is the operational arm of Kian Kasra Quarries, which owns a commitment of our number of quarries across the provinces of Fars, Yazd and Kerman. These include the bank, whom we have famous 800-year-old Marmarit stone quarry in Turan Posht in Yazd, whose first shipment come to regard as a of stone was for the Vatican. key business partner, Today, the company is the Middle East’s leading producer and exporter of Marmarit is an enormous benefit stone, helping make mineral products Iran’s second most exported non-oil commodity as we seek to develop after petrochemicals. our national and Recognising the company’s importance to the national economy, Saman has been highly international markets.” supportive since its launch, providing IRR 45 billion in fixed-capital finance to enable the - Commercial Director purchase of advanced quarrying machinery. Marmarit Golrokh Fars According to the company’s Commercial Director, “Knowing that we have the support and commitment of our bank, whom we have come to regard as a key business partner, is an enormous benefit as we seek to develop our national and international markets.”
35 ANNUAL REPORT 2010/11 BUSINESS REVIEW
BUILDING THE TOURIST ECONOMY ON QESHM ISLAND
“Naturally, their Thanks to its renowned beauty, Qeshm Island is believed by many to be the true site of financial input was the Garden of Eden. Just a few miles off the Iranian coast, it is the Persian Gulf’s largest critical – just as island at close to 100 kilometres in length. It is a magnet for tourists keen to experience its diverse bird life and wealth of natural and cultural wonders. important, though, was their continual It is also now home to the Persian Gulf Hotel, which with capacity for 420 guests, is an willingness to advise extremely valuable asset for its owner, the Sepehr Barin Qeshm Company. us and support our Saman Bank supported the hotel’s development from the start, extending the decisions during a company a series of loans totalling IRR 18 billion starting in October 2009. According challenging period. to Sepehr Barin’s Managing Director, the bank’s support was a vital element in seeing the project to fruition. I would recommend Saman to anybody As he says, “Quite simply, without their help and support this project would not have who understands been realised. This would have been a blow for the local economy, because we have successfully created employment for around 50 local people, quite apart from the other the value of business benefits that a new hotel brings to the community. and mentoring as well as finance.” “Naturally, their financial input was critical – just as important, though, was their continual willingness to advise us and support our decisions during a challenging period. - Managing Director I would recommend Saman to anybody who understands the value of business and Sepehr Barin Qeshm mentoring as well as finance.”
36 GOVERNANCE
37 ANNUAL REPORT 2010/11 GOVERNANCE
CORPORATE GOVERNANCE
OVERVIEW OF CORPORATE GOVERNANCE AT SAMAN BANK It has long been accepted, both before and since the publication of the publication of consultative documents by the Basel Committee on Banking Supervision (BCBS), that good corporate governance is essential to achieving and maintaining public trust in the banking system. Such trust is a primary commercial concern for any bank, and Saman is no different. Additionally, Saman Bank also sees sound corporate governance as a key factor in enabling the proper performance of the banking system and economy as a whole. At its simplest, a good system of corporate governance enables the Board and senior management to manage its business in a responsible and efficient manner. For a bank, the role of financial intermediary – acting for people and organisations that rely upon its competence and honesty – makes good corporate governance absolutely critical. In addition, the credit, market and operational risks that banks face make them highly susceptible to problems arising from poor corporate governance, which means quality is of paramount importance. Saman Bank has five primary objectives for its corporate governance framework, policies and practices, all of which are in line with the principles of the Basel Committee: }} First, they enable Saman to set and plan for achieving its corporate objectives in a realistic context that is unlikely to expose the bank, its shareholders or depositors to excessive risk arising from overly demanding performance targets. }} Second, they provide a controlled environment with which to conduct the bank’s day-to-day affairs. }} Third, they enable bank management to meet its commitments to providing full accountability to its shareholders while protecting the interests of other stakeholders. }} They also provide clear guidance on the best ways to ensure secure and effective operations that comply with national and international banking laws and regulations. }} Finally, they enable the interests of depositors to be fully protected at all times.
38 CORPORATE GOVERNANCE FRAMEWORK Saman Bank is organised to give the Board full oversight at all times of every key element of its corporate governance practices. In addition, key business areas and the independent risk management and audit functions are under the direct supervision of the Board. To place the integrity of this approach beyond dispute, Board members remain distant from the Bank’s day-to-day management and all important operational decisions are taken by the CEO and his team of Executive Vice Presidents. Regular meetings are held between Internal Audit and Control (see page 46) and senior executives to review policies, establish communications channels and monitor progress towards achieving the bank’s strategic objectives. A number of key principles underpin the Board’s position at the apex of the bank’s corporate governance policies. These include the assurance of a deep understanding of its oversight responsibilities, particularly relating to the bank’s risk position. The Board also takes responsibility for the bank’s general activities and business strategy, as well as identifying potential conflicts of interest with other organisations with which it may have dealings. Further responsibilities include ensuring the Board is composed in a way that enhances its efficiency and enables constructive discussions on strategy. As part of this process, the Board oversees the appointment and, where necessary, the replacement of key executives, ensuring that proper succession-planning is in place. Responsibilities do not lie at Board-level alone, however. The need to ensure sound corporate governance runs through every level of staff and management to ensure that the bank takes a fully integrated approach. As a result, a number of key corporate governance principles need to be taken into account by the bank’s full hierarchy, and are the subject of ongoing training and communications initiatives. These principles include the need for all employees to understand the bank’s risk factors as they affect their roles, and to be fully aware of their individual responsibilities relating to their customers and colleagues.
39 ANNUAL REPORT 2010/11 GOVERNANCE
Shareholders Independent Audit
Board of Directors
Strategy Compensation Risk Audit Committee Committee Committee Committee
Internal Audit & Control
President & CEO
Figure 33 Corporate governance structure at Saman Bank
40 Annual General Meeting Saman Bank’s Annual General Meeting (AGM) provides shareholders with the opportunity to review the bank’s financial statements, to read other reports issued by the Board of Directors and to study reports from Saman’s independent and internal auditors.
Board of Directors The Board of Directors is elected for a two-year tenure at every alternate AGM to comprise five main non-executive and two substitute directors. The new Board elects its Chairman and Vice-Chairman at its first meeting, and to be quorate all meetings require the presence of at least four main directors.
Conflicts of interest It is of fundamental importance to Saman Bank and its Board that practical and effective policies exist to address and mitigate any potential conflicts of interest. For this reason, clear guidelines are in place to enable the management of various scenarios. These include situations where the bank carries out a transaction with a company where a Saman Board member holds shares or acts as a board member. The Board will review and vote on such a case in line with banking regulations, independently and without the participation of the member in question. In addition, shareholders are notified of any such case, and might be invited to vote. In any event, such transactions are all fully disclosed in the bank’s financial statements, and are scrutinised by independent auditors for compliance with all appropriate regulations. Any loans extended by the bank to Board members, related parties and independent auditors are regulated within limits set by the Central Bank of Iran (CBI). Internal and independent auditors review such loans on a case-by-case basis, and full details are provided to CBI supervisors. The Board oversees any loans made to senior management of the bank.
41 ANNUAL REPORT 2010/11 GOVERNANCE
BOARD OF DIRECTORS
Allahverdi Rajaei Salmasi Co-founder and Non-Executive Chairman Mr Rajaei was CEO of the Saman Eghtesad Credit Institution and Saman Bank until late 2007, when he became Chairman. Other highlights of his career include periods as Deputy Governor and adviser to the Governor of the Central Bank of Iran, Secretary General of the Tehran Stock Exchange and adviser to the Managing Director of the Saderat Bank of Iran. Mr Salmasi holds a Masters Degree in Accounting from Iran’s Petroleum Accounting College.
Iraj Niknejad Co-founder and Non-Executive Vice-Chairman Mr Niknejad’s 40-year career as an independent auditor, accountant, financial controller and adviser has seen him achieve senior positions, including Board membership of several manufacturing companies listed on the Tehran Stock Exchange. Mr Niknejad is a member of the Iranian Association of Certified Public Accountants (IACPA) and the Iranian Institute of Certified Accountants (IICA). He holds a Masters Degree in Accounting from Iran’s Petroleum Accounting College.
Mohammad Zarrabieh Co-founder and Non-Executive Director Mr Zarrabieh is Chairman of the Tehran Stock Exchange-listed Yazdbaf Group of companies, which includes Plastiran, the Yazdbaf Textile Mill, the Hamedan Glass Company, the Bahman Manufacturing Group and the Iranian Pump Manufacturing Company. Mr Zarrabieh holds a Bachelors Degree in Banking.
42 Reza Krishchi Khiabani Co-founder and Non-Executive Director Mr Krishchi Khiabani is the former CEO and a current Board member of the Krishchi Brokerage Company, which is now the Saman Brokerage Company following its acquisition by Saman Bank. A founding member of the Tehran Stock Exchange, Mr Krishchi Khiabani holds a US Bachelors Degree in Business Administration and Economics.
Saeed Atashkari Non-Executive Director Mr Atashkari is the Board representative of a major Saman shareholder – the National Iranian Copper Industries Pension Fund. As well as holding various executive positions in the Mobarakeh Steel Company, Mr Atashkari has been VP Finance in the National Iranian Steel Company and a Board member of the Khoozestan Steel Company. He has been a lecturer at the Isfahan University of Technology and holds a Masters Degree in Business Management from the Emporia State University in Kansas, USA.
Parviz Moshirzadeh Moayedi Co-founder and Substitute Board Member Mr Moayedi is Chairman of the Saman Brokerage Company and has had a successful academic career as a professor of accountancy and finance. He holds a Masters in Accounting from the University of Wales in the UK.
Vali Zarrabieh Co-founder, Substitute Board Member and President and Chief Executive Officer Mr Zarrabieh, who is also a Board member of both the Saman Electronic Payment Company and the Saman Brokerage Company, became first Deputy CEO and then CEO of Saman Bank in June 2010. He holds a Masters in Finance from the CASS Business School in London (specialising in corporate finance and valuation) and an MBA, specialising in strategy, from Manchester Business School, UK.
43 ANNUAL REPORT 2010/11 GOVERNANCE
BOARD COMMITTEES
The Strategy Committee The Strategy Committee defines Saman Bank’s strategy through future scenarios and SWOT analysis. It is responsible for shaping the bank’s mission, vision and strategic long-term objectives and overseeing the internal implementation of the bank’s strategy. The Committee also reviews the bank’s organisational structure and makes sure it is aligned to Saman’s strategic vision and objectives. Comprising the Chairman of the Board, CEO, one non-executive Board member and the Executive VP of Research & Planning (see page 49), the Strategy Committee assesses problems and obstacles that might prevent Saman from achieving its strategic goals. It also studies the bank’s position in the country’s banking system, and makes proposals about new banking products and services.
The Audit Committee Saman Bank established its Audit Committee in 2007, in line with the Basel Committee’s recommendations. Today, the Saman Bank Audit Committee is made up of non-executive members of the Board and members of the Iranian Association of Certified Public Accountants. The Audit Committee has a wide range of responsibilities, which include overseeing the annual and interim financial reporting processes of which this report is a key element. As part of this responsibility, it reviews the bank’s audited financial statements prior to publication, working with the bank’s executive management and with internal and independent auditors. The Committee also oversees the selection or amendment of the accounting policies implemented by the bank’s executive management, which must comply with national accounting frameworks governed by monetary and banking laws. Further responsibilities include ensuring the integrity of the bank’s accounting policies, financial reporting and disclosure in partnership with executive management. The Committee also ensures that independent and internal auditors have full access to the information, records and other documentation they need.
44 The Risk Committee The main function of the Risk Committee is to monitor the bank’s senior management in their role of identifying, addressing and mitigating the full range of credit, market, liquidity, operational, compliance, reputational and other risks that the organisation faces. Its responsibilities include implementing the bank’s risk management policies and processes, ensuring risk management directives and procedures are up to date and properly observed, and that risk management and internal control systems are in place. Comprising the Chairman and Vice-Chairman of the Board, CEO, Executive VP of Research & Planning and Director of Internal Audit and Control, the Risk Committee also engages additional risk consultants if necessary.
The Compensation Committee At Saman Bank, the Compensation Committee oversees the financial rewards and other benefits received by the CEO and other senior management and key employees. For this reason, its membership is made up of non-executive members of the Board, reducing the potential for conflicts of interest and providing reassurance to shareholders and other stakeholders. The Committee’s main role is to implement the measures adopted by the Board to ensure that executive compensation is in line with the bank’s long-term strategy, objectives and governance structure. All recommendations made by the Committee are passed to the Board for final approval. The compensation and benefits received by the bank’s most senior managers are performance-related, taking into account their success in achieving objectives and adding value to the bank’s operations and commercial performance.
45 ANNUAL REPORT 2010/11 GOVERNANCE
INTERNAL AUDIT AND CONTROL
The Internal Audit and Control Unit is the executive arm of the bank’s Audit Committee, responsible for bringing a systematic and effective approach to improving its risk management, control and governance processes. It reports to the Board via the Audit Committee through clear procedural channels. The bank ensures the Internal Audit and Control Unit complies fully with relevant regulations, such as those of the Central Bank of Iran (CBI). It also follows the recommendations of the Basel Committee on internal control and audit, and the international standards on internal control published by the Institute of Internal Auditors (IIA). At Saman Bank, the Board and senior management recognise the importance of internal auditing as a key element of its control systems that enables effective risk management. For this reason, they ensure that all units within the organisation are fully aware of its role and value. They also make sure the bank makes timely and proper use of internal audit findings and that management use them to address any problems. The bank achieves its internal and operational audit objectives by implementing COSO’s1 Guidance on Monitoring Internal Control Systems, which includes risk assessment as one of the five main components of an integrated internal control framework. The COSO approach also places emphasis on the strategic management and planning of audit activities based on the bank’s risk management model. Following this approach enables Saman to increase its efficiency, effectiveness and economic viability. To maximise the value of internal audit reports presented to the Audit Committee and the Board, constant attention is paid to increasing the independence of the bank’s internal auditors. They are also involved in key areas of decision-making that affect the strength of the bank’s internal controls.
1. Committee of Sponsoring Organizations of the Treadway Commission
46 “Over the years, the stability of Saman’s Board membership has helped the bank create an excellent relationship with shareholders based on mutual trust and respect.”
- Director of Internal Audit and Control Saman Bank
Specific undertakings of Internal Audit and Control include employee-satisfaction surveys, which are carried out at least once a year. The surveys also invite all personnel to share anonymously their ideas and concerns with the Audit Committee and the Board. A section within Internal Audit and Control also monitors the activities of bank subsidiaries and presents its findings to the Audit Committee and the Board. In addition, Internal Audit and Control follows up any directives issued by the Board to individual units within three months, presenting its subsequent reports back to the Board. Saman Bank’s internal auditor is Javad Goharzad MA, Director of the bank’s Internal Audit and Control Unit. A member of many professional bodies, including the Iranian Association of Certified Public Accountants (IACPA), the Iranian Institute of Certified Accountants (IICA) and the Iranian Association of Official Experts (IAOE), Mr Goharzad’s 35-year career includes more than ten years’ experience as independent and internal auditor for banks and financial institutions. He also has over 15 years’ experience as a director or partner in professional audit practices under the Securities and Exchange Organisation of Iran. In addition, he has spent over 15 years as independent auditor to public limited companies.
INDEPENDENT AUDIT
Saman Bank shareholders always seek independent auditors from among the most respected chartered accountants in Iran. Senior management fully appreciate the key role that such professionals have to play in ensuring the quality of Saman’s reputation and the health of its operations. The bank’s Audit Committee works hard to increase the reach and effectiveness of independent auditors. In this way, they enable the bank’s financial statements to present a fair and accurate picture of its status and performance in all key areas of activity. Saman Bank’s independent auditor is the Tehran-based chartered accountancy practice Bayat Rayan. Founded in 1978, Bayat Rayan is one of the leading professional firms providing assurance, risk, tax, business and financial advisory services to local and global businesses that operate in Iran. Among many other sectors and industries, banking is one of the firm’s specialist areas. Until 2010, Bayat Rayan was a member of the KPMG International network. Membership was temporarily suspended in March that year in line with US sanctions against Iran.
47 ANNUAL REPORT 2010/11 GOVERNANCE
EXECUTIVE MANAGEMENT
Credit Division
Domestic Branch Network Division Banking Investments Division
VIP Client Services Advisers & Monitors
International Banking Division International Foreign Exchange Banking Foreign Currency Assets & Liabilities
Compliance Division
Marketing & Public Relations Division
President Legal Division & CEO Saman Financial Group Relations
Risk Assessment & Control
Security
Finance Division Finance & Human Resources Division Administration Logistics Division
Management Committees
Organisation & Procedures Division Research & Research & Development Division Planning Information Technology Division
Figure 34 Executive management structure at Saman Bank
48 Executive team
}} Ahmad Mojtahed Executive VP Research & Planning Dr Mojtahed joined Saman Bank in March 2010 following a distinguished academic career that included periods as Head of the Monetary and Banking Research Institute, a lecturer in economics and in various other posts at Allameh Tabatabaei University, Head of the Business and Economics Committee of the Development and Planning Council at Iran’s Ministry of Science, Research and Technology, and Visiting Professor at the University of Illinois, USA. He has also been adviser to the Governor of the Central Bank of Iran and to the VP of economics at Iran’s Ministry of Economic Affairs and Finance. He is currently Chairman of the Board of Iranian Credit Bureau & Scoring Company.
}} Mostafa Zarghami Executive VP Domestic Banking Mr Zarghami’s banking experience includes Board positions at the Saderat Bank of Iran, Sarmayeh Bank, the Saderat Brokerage Company and a number of other investment and leasing companies. He is currently on the Board of the Maskan Bank Investment Management Company. Mr Zarghami has also been a former Deputy Minister of Economic Affairs and Finance and Head of the Office for Financial Research and Policy in the Ministry of Economic Affairs and Finance. He holds a Masters Degree in Economics from Tehran’s Shahid Beheshti University and has lectured at the School for Economic Affairs, the Institute for Humanities and Cultural Studies, and the University of Mazandaran.
}} Seyed Mohammad Vahidi Foomani Executive VP International Banking Mr Foomani joined Saman Bank in September 2010 following a career spent exclusively at the Melli Bank of Iran, where he rose to become a member of the Board. He holds a Masters Degree in Banking from the Iran Banking Institute.
}} Behrooz Ebrahimi Executive VP Finance & Administration Mr Ebrahimi joined Saman Bank in September 2010 following a career that includes some 20 years as Managing Director, Audit Director and Auditor at a number of audit firms. In addition, he has been Chairman of the Agah Brokerage Company and Assistant Managing Director of Stratus Group. Mr Ebrahimi holds an MBA from Tehran’s Industrial Management Institute.
49 ANNUAL REPORT 2010/11 GOVERNANCE
Division heads
}} Reza Aghababaei Investments Doctorate in Economic Development, University of Tehran
}} Gholamabbas Khaksar Branch Network Masters in Business Management, Shahid Beheshti University
}} Seyed Morteza Hoseininejad Research & Development Masters in Economics, Shahid Beheshti University
}} Reza Heidari Organisation & Procedures Masters in Economics, Tehran University
}} Yousef Heidari Rahmatabadi Logistics Bachelors in Industrial Management, Azad University
}} Seyed Mohammad Rajaei Nobari Legal Masters in Law, Azad University
}} Ali Rahimian Human Resources Bachelors in Industrial Engineering, Azad University
}} Jalal Sanatkhani Credit Bachelors in Industrial Management, University of Tehran
}} Fereshteh Zarrabieh Marketing & Public Relations MBA, with Specialisation in Marketing Strategy, Industrial Management Institute
}} Mehdi Gharahi Information Technology Masters in Industrial Management, University of Tehran
}} Hossein Kourosh Passandideh Compliance Masters in Economics, Mazandaran University
}} Farideh Geraminejad International Banking Masters in Linguistics, University of Tehran
}} Khosro Latifi Ahvaz Finance Masters in Accounting, Azad University
50 “The health of the bank depends on its ability to correctly gauge credit risk – so the more complete and accurate we can make an evaluation report, the lower is the risk faced by the bank.”
- Lending Application Evaluation Officer Saman Bank
RISK MANAGEMENT
Saman Bank bases its long-term risk strategy on two priorities. First, it observes the regulations enforced by the Central Bank of Iran for the Iranian banking industry, so ensuring total compliance with the key domestic authority. Second, it is currently developing a formal risk management framework in accordance with the principles of good corporate governance. This will enable the effective and efficient implementation of the guidelines of the Basel Committee on Banking Supervision (BCBS). These will be based on the Basel II international regulatory framework, whose measures are designed to enhance the quality and transparency of a bank’s disclosures, to improve risk management and governance, and to provide protection against internal or external economic shocks. This framework will help the bank to identify, prioritise and address the risks it faces. It will also enable the exchange of information and support required to organise risk-mitigation activities. Furthermore, it will ensure added scrutiny and the direct personal involvement of Saman’s most senior leaders in all key aspects of risk management at the bank. Saman management considers it imperative for risk owners and other key employees at various levels of the organisation to have the understanding and resources they need to protect the bank’s interests. As a result, there is a strong focus at the most senior management levels on providing access to appropriate training and a highly resilient IT infrastructure for the analysis and monitoring of risk.
Risk categories The bank monitors exposure to four major categories of risk, namely credit risk, liquidity risk, market risk and operational risk, as outlined below.
Credit risk Saman Bank uses the Basel II standardised approach to measure credit risk. Within this approach, the bank’s capital risk requirements are calculated at fixed intervals. During the year, Saman has also implemented a number of key initiatives to improve its credit risk profile. Prominent among these has been the development of a new tool to assess on a monthly basis the quality of new loans offered by the bank, helping to drive down its non-performing loans (NPL) ratio within its overall lending portfolio. It should be noted that reducing this ratio is considered one of the bank’s most important operational objectives.
51 ANNUAL REPORT 2010/11 GOVERNANCE
The bank has also been working to improve its ability to segment its customer base, with a new reporting regime on the concentration of loans and repayment performance within a range of customer categories. In a bid to increase the quality and efficiency of its credit strategy, the bank uses the Basel II methodology to estimate credit risk parameters. These include probability of default (PD), exposure at default (EAD) and loss-given default (LGD) for various types of credit. Such measures help the bank to calculate its risk-weighted assets. It conducts a similar exercise to calculate the risk and performance of loans to different industry sectors, enabling more effective targeting in its sector-based business lending strategy. On a broader front, the bank also carries out a range of stress tests to forecast the impact of various macro-economic scenarios on its overall credit portfolio.
Liquidity risk For any financial institution, it is vital to have in place a robust liquidity risk management framework, including strategy, policy and practices, which ensure the protection of high-quality liquid assets under a wide range of stress-test scenarios. To achieve this, Saman Bank’s liquidity risk management is based on its ability to forecast and mitigate its precise liquidity needs in the face of unexpected shortfalls and excesses in its liquid assets.
Market risk Every business faces a varying degree of market (or systematic) risk, resulting from economic changes or events that to some degree may impact upon it and all its competitors. The seriousness of such an impact will ultimately depend on the quality of the systems in place to manage and mitigate risk – and Saman Bank has developed processes to help it minimise the key systematic risks it faces. The bank’s business model and activities primarily expose it to risks resulting from the fluctuating values of the different currencies in which it deals (exchange rate risk) and the shares it holds (share price risk).
Fluctuating currency values In order to address exchange rate risk, Saman has always observed as a priority the imposition of Central Bank of Iran limits on the amount of any one currency it should hold at any one time, constantly monitoring these totals throughout the year. In addition, the levels of profit or loss brought about by exchange rate fluctuations are continually tracked on a monthly basis as a key performance indicator for Saman’s currency portfolio.
Mitigating share price risk The bank also uses an advanced value at risk (VaR) methodology – widely perceived as global best practice – to manage and mitigate the risks inherent in the bank’s share portfolio. It regards maintaining the appropriate balance between VaR and the bank’s share portfolio performance as a key priority.
52 Operational risk During 2010/11, Saman Bank purchased and implemented an advanced operational risk management (ORM) software tool, based on the Basel II definition of operational risk: “the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events”. At the same time, the bank initiated the recording of any operational losses associated with its various business units. This will enable the development of an ‘operational loss event’ database within the ORM software during 2011/12, which is expected to help the bank identify the operational risks involved in each of its activities and mitigate them through optimised controls. It is envisaged that these controls will enable the bank to reduce its operational risk capital requirements.
Capital adequacy To protect depositors and ensure the integrity of the country’s financial systems, the Central Bank of Iran, in compliance with the Basel I accord, requires that all banks operating under its regulation have a minimum capital adequacy ratio of 8%. Having the appropriate capital adequacy provisions in place theoretically enables a bank to absorb any unexpected losses that may occur. Saman Bank’s Basel I capital adequacy ratio, based on the bank’s total capital, comprising both its Tier One and Tier Two capital (see page 93 in the financial statements for a breakdown), and its total risk- weighted assets was calculated as 9.90% for 2010/11. The bank also calculates its capital adequacy ratio based on the Basel II accord (not yet obligatory in Iran). For the financial year 2010/11, Saman’s Basel II capital adequacy ratio was calculated as 19.47%. This was based on the bank’s total capital, comprising both its Tier One and Tier Two capital, and its Basel II capital requirements for credit, market and operational risks, standing at IRR 1,854, 247 and 170 billion, respectively.
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COMPLIANCE
Reporting directly to the CEO, the Compliance Division at Saman Bank uses advanced statistical tools to ensure that all business units – including head office and the complete branch network – are in full compliance with relevant regulations. As part of this responsibility, it acts as a source of advice and guidance across the organisation. It also manages Saman’s Anti-Money Laundering Unit and ‘Know Your Customer’ (KYC) regime (see below for details on both). Performance of the Compliance Division is evaluated by the Internal Audit and Control Unit and a performance evaluation report is forwarded to the Board via the corresponding channels.
A year in action During the financial year 2010/11, the Division focused its efforts on internal inspections. These included a series of visits to Saman branches and relevant head-office departments, as well as the remote monitoring and control of branches, offices and business units. It also used advanced fraud- detection software to check suspect transactions and to investigate any suspicious activities on the part of Saman employees or customers. The Division was responsible for investigating and handling any internal and external instances of inappropriate behaviour. These might include administrative wrong-doing by staff, suspected customer offences, enquiries received from Iran’s judicial authorities or complaints made through the Central Bank of Iran (CBI) or other official bodies.
Anti-money laundering Saman Bank’s Anti-Money Laundering Unit operates according to guidelines and regulations laid down by the CBI. It is ultimately responsible for monitoring customer transactions and undertaking the in- depth review and investigation of suspicious cases. The unit regularly issues internal advice and guidance on a range of subjects. These include how to prevent money-laundering throughout the branch network by applying KYC principles (see opposite page), by reporting on suspicious activities and by investigating the provenance of dubious funds. It is also an important source of data, responsible for documenting and providing details of suspicious transactions to regulatory bodies, and reporting on anti-money laundering activities to international correspondent banks.
54 Transparency Saman Bank seeks at all times to be open and transparent in its operations, providing all required financial and other information at predetermined times to supervisors at the Central Bank of Iran. It uses its website to provide other important information for customers, depositors and other stakeholders.
Know Your Customer The Basel Committee guidelines on banking supervision place particular emphasis on ‘Know Your Customer’ (KYC) – a set of due diligence principles designed to help banks co-operate with law enforcement authorities and avoid involvement with suspicious transactions. Saman’s Compliance Division oversees the training of new and existing employees at the bank to ensure that everybody is up-to-date with the demands of KYC. Related initiatives include the establishment of a communications forum through which it delivers seminars for staff at all levels and develops e-training materials based on real fraud and forgery cases. The Compliance Division also ensures that KYC guidelines are properly carried out at all levels within the bank, continuously monitoring branch operations and identifying gaps in regulatory control. To this end, it works in close cooperation with supervisory and regulatory bodies.
55 ANNUAL REPORT 2010/11 GOVERNANCE
HUMAN RESOURCES
The creation and implementation of Saman Bank’s new customer-focused strategy in the financial year 2010/11 places a significant responsibility on the bank’s employees – the people who have to create the loyalty and positive word of mouth that will enable Saman to achieve its five-year business objectives. Saman Bank’s senior management recognises that before employees can achieve this, they first need to be fully committed to the bank and its new strategic direction. The Saman Human Resources Division is focused on three main areas – the Personnel, the Training and the Welfare offices on which this part of the report concentrates.
Figure 35 | Employees
1,618
1,506
1,456
2009 2010 2011
Saman’s consistent growth in clients, accounts, branches and transactions is reflected by the continuing increase in its employee headcount, up by 7.4% to 1,618 in 2010/11 from 1,506 in 2009/10.
56 Figure 36 | Employees by educational level Figure 37 | Employees by location
1,007 32% 30% 84
389 134 38%
4
Masters Higher diploma Bachelors Head offices Tehran branches Other cities
Doctorate High school diploma & lower
Over 71% of the bank’s employees hold a university Over 70% of Saman’s workforce is based away from qualification, the great majority of which are head offices in the branch network. This proportion bachelors degrees. will grow further in years to come with the planned increase in branch numbers.
57 ANNUAL REPORT 2010/11 GOVERNANCE
The Personnel Office For Saman Bank’s employees to deliver the exceptional standards of customer service that the new strategy and objectives require, first they must be given every opportunity for career development. This is why Saman developed during the financial year 2010/11 an analytical approach to appraisal and reward, based on international best practice parameters, which is designed to give every employee a clear organisational ranking and personalised career path with the bank. In addition, the Personnel Office undertook an in-depth study of all the job functions across the organisation, which will ensure that the best possible structure exists to provide a rewarding career path and to meet customer needs. More important than any of these enterprises, however, is the ongoing initiative to ensure that employees are fully in tune with the need to provide an emotionally satisfying service based on the human qualities of empathy and understanding. This is a major cultural task, led in partnership with the Training Office, which begins with the process of recruiting the right people into roles across Saman’s head office and throughout its branch network. This cultural priority is at the heart of all the Personnel Office’s planned achievements for 2011/12, which also involve finalising job specifications across the organisation and implementing a new compensation system. The year will also see the implementation of a rigorous and transparent employee promotion scheme, which is fair and based purely on merit. Further initiatives on which we will report next year include the development of a succession-planning system and code of ethics.
The Training Office Building on this core of good employment practice, Saman Bank delivered an average of 23 hours of training to each of its 1,680 employees during 2010/11, covering a wide range of technical and employability skills. All of these hours shared a common purpose – to help Saman Bank employees be the best-equipped in the Iranian banking industry to satisfy customers at every level of their relationship. The focus was therefore on enhancing the efficiency of “The way I’ve service delivery as part of delivering a satisfying overall experience with a tangible developed and emotional reward. grown with Saman Key projects during the year included the delivery of training for assistant branch Bank makes me managers, foreign exchange, credit and IT & e-banking staff and new hires. There feel like a sapling was also an important focus during the year on psychological and behavioural turning into a tree.” development, particularly among senior managers and branch personnel. In addition, there was an intensive focus on improving Saman’s collective expertise in electronic and international banking through important upgrades to its training - Member of the HR team programmes in these areas. Saman Bank
58 Another major priority for the year was to ensure the continuous improvement of the bank’s training activities in line with its strategic direction. For this reason, much effort was spent organising new training initiatives in partnership with training institutions, universities and other organisations. These included the Central Bank of Iran (CBI), the Industrial Management Institute, the Monetary and Banking Research Academy, the Business Training Centre, the Iranian Institute of Certified Accountants, Euromoney, the Sharif University of Technology and Shahid Beheshti University. In addition, the bank invested considerable resources in improving its training systems and infrastructure during the year, including early planning of its investments in e-learning and improved classroom spaces. Saman also used the international ISO 10015 standard to improve its overall training quality management. Looking ahead, training-related activities for 2011/12 will include the implementation of the new e-learning system, further development of the bank’s classroom spaces in line with quality requirements, and the upgrade of reading facilities to meet accepted library standards. In addition, Saman is committed to improving its educational needs-assessment process, to ensure that all new training activities and materials match the job function requirements of the complete workforce. Other initiatives for 2011/12 include the standardisation of training materials across the organisation and the introduction of courses for the International Computer Driving Licence (ICDL).
Figure 38 | Employees total training hours
11,702
14,153
11,441
Pre-employment Head offices Branch network
Ensuring a level of competence and understanding among future employees before they join Saman Bank is of vital strategic importance, which is why over 11,000 hours of pre-employment training was delivered in 2010/11. While more hours of training took place in the branch network, hours per capita were greatest among head office staff where 478 personnel shared 11,702 hours (over 24 hours each).
59 ANNUAL REPORT 2010/11 GOVERNANCE
The Welfare Office Saman Bank’s Welfare Office aims to enhance staff motivation and loyalty by providing employees with access to a range of health, sports and recreation-related services and by providing the elements of a competitive benefits package. During the financial year 2010/11, the bank focused on improving its portfolio of welfare services and expanding the range of sports and leisure activities available to employees. In addition, it organised new membership schemes for Saman people with a number of sporting and cultural centres. It also improved the complementary insurance services available to employees and increased the shares held by staff in line with the bank’s growing capital value. During 2011/12, the bank plans to continue much of this work. It is committed to enhancing the range of pension, life and health insurance services available to employees and their families, as well as launching a health clinic. It will also be implementing occupational and psychotherapy advisory services for employees, and extending the Saman employee holiday network.
60 CORPORATE SOCIAL RESPONSIBILITY
61 ANNUAL REPORT 2010/11 CORPORATE SOCIAL RESPONSIBILITY
“Opening up new educational opportunities for children growing up in deprived areas is the single greatest contribution we can make to their future and to that of our country as a whole. This is very important work that all our people find enormously satisfying.”
- Co-founding Board Member Saman Bank
SAMAN BANK’S ROLE IN THE COMMUNITY
Saman Bank sees itself as a responsible corporate citizen that helps support and protect the most vulnerable members of society. During the financial year 2010/11, its primary focus was on selecting and funding charities with a direct positive impact on the lives of those least able to help themselves.
Building a new school each year Saman Bank is committed to helping underprivileged children through its support for the Iranian education system Central to this is the bank’s 50/50 partnership with the Ministry of Education’s Organisation for the Renovation of Schools, which will enable the building of one new school a year in deprived (usually rural) areas of the country. As a result, during the financial year 2010/11 Saman contributed IRR 350 million (nearly US$34,000) to enable the construction of a small four-classroom school near Bojnourd in north eastern Iran’s North Khorasan Province. The success of the initiative’s first year means that Saman will make a larger contribution in the financial year 2011/12 of IRR 1,500 million (around US$145,000) to help build a slightly larger school in Parand near Tehran. According to a Saman Bank co-founding Board member, “Opening up new educational opportunities for children growing up in deprived areas is the single greatest contribution we can make to their future and to that of our country as a whole. This is very important work that all our people find enormously satisfying.”
62 “The most gratifying result is when our support and the commitment of the charity have helped improve families’ living standards to the point where they no longer need our help. For us, that is the best possible outcome to see.”
- Head of Charitable Giving Saman Bank
Helping young high-achievers fulfil their potential One of the most powerful ways of helping a high-achieving child to fulfil his or her potential is to enable them to stay in fulltime education, despite the financial pressures and other challenges that they may be facing in other parts of their lives. Child Foundation is an international charity, operating in Iran, which aims to eliminate the need for children to leave school prematurely. To date, it has helped to support the education of some 5,500 children. Saman Bank is committed to supporting the charity’s work through financial giving of close to IRR 600 million (around US$60,000) each year. To date, Saman’s contribution has helped sponsor 88 students from low-income or broken families. As a direct result of this support, some are now at university while others have found rewarding employment. According to Saman Bank’s Head of Charitable Giving, “The most gratifying result is when our support and the commitment of the charity have helped improve families’ living standards to the point where they no longer need our help. For us, that is the best possible outcome to see.”
63 ANNUAL REPORT 2010/11 CORPORATE SOCIAL RESPONSIBILITY
64 The world’s best help for its poorest children The Zanjireh Omid International Charity Institute was founded in 2007 as the Iranian arm of the international French-based foundation La Chaine de l’Espoir, which aims to provide the best possible medical care for the poorest children in developing countries, regardless of their nationality, religion or race. During the financial year 2010/11, Saman Bank made two separate contributions to the charity’s operations. The first of these was to fund vital paediatric surgery, costing a total of IRR 400 million (US$38,595), for 10 low-income children. The bank also plans to repeat this donation during 2011/12. The second major project was Saman’s donation of IRR 500 million (US$48,244) to help equip a new paediatric rehabilitation clinic in Tehran, alongside further financial support from the Japanese embassy in Iran. “We are supportive of Zanjireh Omid because they enable children to benefit from the skills of internationally renowned surgeons who regularly travel to Iran to give their services for free,” says Saman Bank’s Head of Marketing & Public Relations. “It’s a case of the poorest of the poor receiving the help of the best in the world.”
65 FINANCIAL STATEMENTS 2010/11 FINANCIAL STATEMENTS
CONTENTS
Independent auditor’s report...... 68 Consolidated balance sheet...... 70 Consolidated profit and loss account ...... 71 Consolidated statement of retained profit & loss. . . . . 71 Consolidated statement of cash flows ...... 72 Balance sheet...... 73 Profit and loss account...... 74 Statement of retained profit and loss...... 74 Statement of cash flows...... 75 Notes to the financial statements...... 76
67 FINANCIAL STATEMENTS 2010/11
Independent Auditor’s Report to the Shareholders of Saman Bank (Public Joint Stock Company)
We have audited the accompanying consolidated financial statements of Saman Bank (“the Bank”), which comprise the balance sheet as at March 20, 2011, the income and cash flow statements for the year then ended and a summary of significant accounting policies and other explanatory notes, for both the Bank and Saman Group (the consolidated entity). The consolidated entity comprises the Bank and the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial statements The directors of the Bank are responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in Iran. This responsibility includes: designing, implementing and maintaining internal control, relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. Except for the matter referred to in paragraph 1-2 below, we conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
68 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1- In relation to the Bank’s tax position we noted that:
1-1- There is a difference between income tax payable as per the tax assessments raised by the Tax Authorities for the financial years ended March 2006, 2008 and 2009 and the corresponding provisions made by the Bank amounting to Rls 325,000m. The tax assessments have been protested by the Bank and the matter has been referred to the relevant Tax Authorities for review. No provision has been made by the Bank for the above shortfall, which would be payable if the assessments are not amended. The Bank’s final tax liabilities in respect of the above years would be determined once the final assessments are issued by the Tax Authorities.
1-2- The provisions for 2010 and 2011income tax have been made on a similar basis as previous years. Given the Bank’s tax history, it is likely that the Tax Authorities will raise tax assessment in excess of amount provided by the Bank. The amount of additional tax liability, if any, cannot be determined at present.
Auditor’s opinion In our opinion, except for the effects on the financial statements of the matter referred to in paragraph 1-1 above and except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves as to the adequacy of tax provision in 1-2 above, the accompanying financial statements present fairly, in all material respects, the financial position of Saman Bank and the consolidated entity as of March 20, 2011 and of their performance and cash flows for the year then ended in conformity with the Iranian Accounting Standards.
Tehran: May 30, 2011 Bayat Rayan Chartered Accountants
69 FINANCIAL STATEMENTS 2010/11
Consolidated balance sheet as at March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Assets: Cash 4 996,708 454,838 Due from the CBI 5 6,114,846 4,904,277 Due from other financial institutions 6 8,135,671 4,055,999 Loans 7 60,118,285 34,032,443 Participation bonds 8 3,337,627 1,538,800 Investments 9 212,556 115,259 Investments in associated entities 10 92,676 26,149 Tangible fixed assets 11 1,384,288 1,287,375 Intangible assets 12 1,188,726 1,183,788 Goodwill 13 24,243 28,110 Other assets 14 3,371,698 1,699,963 Total assets 84,977,324 49,327,001
Liabilities and equity: Due to the CBI 15 4,154,660 430,674 Due to other financial institutions 16 10,601,456 2,387,070 Customer deposits 17 53,141,901 38,906,412 Other deposits 18 1,991,390 1,158,345 Other liabilities 19 10,090,622 3,435,077 Provision for income tax 20 165,787 96,194 Provision for staff termination benefits 21 56,155 35,503 Total liabilities 80,201,971 46,449,275
Share capital 22 3,000,000 1,800,000 Shares held by subsidiaries (9,003) (7,752) Legal reserve 23 617,024 389,064 Retained earnings 1,136,624 668,146 Parent entity total equity 4,744,645 2,849,458 Minority interest 22 30,708 28,268 Total shareholders’ equity 4,775,353 2,877,726
Total liabilities and shareholders’ equity 84,977,324 49,327,001
Off balance sheet items: L/C commitments 31 2,857,797 2,632,390 Guarantee commitments 31 2,173,999 1,703,639 Other commitments 31 1,823,320 1,318,869
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
70 Consolidated profit and loss account for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Income: Loan interest 24 6,215,313 5,315,058 Investments and deposits 25 2,108,100 1,215,211 Foreign exchange 26 6,393,205 719,012 Others 27 528,759 359,134 Total income 15,245,377 7,608,415
Expenses: Deposit interest 5,913,420 5,011,251 Other interest 28 302,651 52,803 Foreign exchange 26 5,971,448 597,959 General and administrative expenses 29 912,796 740,550 Financial expenses 1,604 678 Commission 30 173,216 148,696 Provision for doubtful debts 3-6 467,570 235,195 Total expenses 13,742,705 6,787,132 Operating profit 1,502,672 821,283 Profit from associated entities 6,772 2,211 Profit before tax 1,509,444 823,494 Income tax 20 (165,320) (96,149) Net profit for the year 1,344,124 727,345 Attributable to: Parent’s shareholders 1,341,610 737,549 Minority interest 2,514 (10,204) Net profit for the year 1,344,124 727,345
Consolidated statement of retained profit and loss for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Net profit for the year 1,341,610 737,549 Balance at beginning of the year 675,415 409,659 Prior years’ adjustments (7,269) 8,262 Dividends paid (629,339) (359,509) Directors’ bonuses (15,833) (9,348) 1,364,584 786,613 Transfer to legal reserve 23 (227,960) (118,467) Net profit available for distribution 1,136,624 668,146
Minority’s share of accumulated profits (4,484) (6,226)
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
71 FINANCIAL STATEMENTS 2010/11
Consolidated statement of cash flows for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Operating activities: Cash flow from operating activities 32 4,827,419 126,473 Dividends paid (629,339) (359,509) Income tax paid (189,817) (121,816) Net cash flow from operating activities 4,008,263 (354,852)
Investing activities: Net increase in tangible fixed assets (244,991) (163,622) Purchase of non-current assets (11,255) 11,138 Net cash flow/(used in) from investing activities (256,246) (152,484)
Financing activities: Shareholders’ funds for capital increase 1,200,000 111,959 Interbank loans 131,698 60,996 Net cash flow from financing activities 1,331,698 172,955
Net increase/(decrease) in cash 33 5,083,715 (334,381) Cash at beginning of the year 33 3,660,283 3,994,664 Cash at end of the year 33 8,743,998 3,660,283
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
72 Balance sheet as at March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Assets: Cash 4 995,669 454,258 Due from the CBI 5 6,114,846 4,904,277 Due from other financial institutions 6 8,117,846 4,049,190 Loans 7 60,245,950 34,183,564 Participation bonds 8 3,337,627 1,538,800 Investments 9 428,189 259,052 Tangible fixed assets 11 1,220,623 1,151,618 Intangible assets 12 1,131,280 1,125,696 Other assets 14 3,320,117 1,648,719 Total assets 84,912,147 49,315,174
Liabilities and equity: Due to the CBI 15 4,154,660 430,674 Due to other financial institutions 16 10,598,762 2,387,070 Deposits 17 53,196,178 38,911,298 Other deposits 18 1,992,939 1,159,845 Other liabilities 19 9,923,794 3,377,826 Provision for income tax 20 160,302 91,973 Provision for staff termination benefits 21 54,880 34,749 Total liabilities 80,081,515 46,393,435
Share capital 22 3,000,000 1,800,000 Legal reserve 23 614,531 387,290 Retained earnings 1,216,101 734,449 Total shareholders’ equity 4,830,632 2,921,739
Total liabilities and shareholders’ equity 84,912,147 49,315,174
Off balance sheet items: L/C commitments 31 2,857,797 2,632,390 Guarantee commitments 31 2,173,999 1,703,639 Other commitments 31 1,823,320 1,318,869
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
73 FINANCIAL STATEMENTS 2010/11
Profit and loss account for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Income: Loan interest 24 6,239,538 5,346,944 Investments and deposits 25 2,116,475 1,224,336 Foreign exchange 26 388,965 103,747 Others 27 517,128 367,683 Total income 9,262,106 7,042,710
Expenses: Deposit interest 5,913,897 5,011,370 Other interest 28 302,651 52,803 General and administrative expenses 29 895,428 715,565 Commission 30 178,487 148,696 Provision for doubtful debts 3-6 456,697 235,195 Total expenses 7,747,160 6,163,629
Profit before tax 1,514,946 879,081 Income tax 20 (160,302) (91,973) Net profit for the year 1,354,644 787,108
Statement of retained profit and loss for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Net profit for the year 1,354,644 787,108 Balance at beginning of the year 733,469 431,151 Prior years’ adjustments 980 3,109 Dividends paid (630,000) (360,000) Directors’ bonuses (15,750) (9,000) 1,443,343 852,368 Transfer to legal reserve 23 (227,242) (117,919) Net profit available for distribution 1,216,101 734,449
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
74 Statement of cash flows for the financial year ended March 20, 2011
Note 2011 2010 (Restated) Rls (m) Rls (m) Operating Activities: Cash flow from operating activities 32 4,799,719 127,482 Dividends paid (630,000) (360,000) Income tax paid (185,917) (118,128) Net cash flow from operating activities 3,983,802 (350,646)
Investing activities: Net increase in tangible fixed assets (223,926) (145,126) Purchase of non-current assets (10,290) (4,734) Net cash flow/(used in) from investing activities (234,216) (149,860)
Financing activities: Shareholders’ funds for capital increase 1,200,000 111,959 Interbank loans 129,004 60,996 Net cash flow from financing activities 1,329,004 172,955
Net increase/(decrease) in cash 33 5,078,590 (327,551) Cash at beginning of the year 33 3,652,896 3,980,447 Cash at end of the year 33 8,731,486 3,652,896
The accompanying notes on pages 76 to 96 are an integral part of these financial statements.
75 FINANCIAL STATEMENTS 2010/11
Notes to the financial statements for the financial year ended March 20, 2011
1- Background
1-1- Saman Bank (Public Private Joint Stock Company – the Bank) was registered with Tehran Registrar of Companies under registration number 154444 in August 1999. The Bank commenced operation initially as a credit institution but later was issued with a full banking license by the Central Bank of Iran (CBI) under the provision of the “Law for the Establishment of Non-Government Owned Banks” in August 2002. The Bank’s initial share capital was Rls 200,000m.
1-2- The Bank’s activities are governed under the provisions of the “Monetary and Banking Law of Iran” of July 1972 and the Non-Usury Banking Law. The Bank undertakes all the banking activities recognised under the above laws and other CBI monetary and banking regulations.
1-3- The financial statements comprise the consolidated financial statements of the Group together with the financial statements of the parent entity, the Bank.
1-4- The number of staff employed at the year-end was as follows:
Consolidated Parent entity 2011 2010 2011 2010 Staff 1,708 1,598 1,618 1,506
1-5- The number of branches at the year-end was as follows:
Parent entity 2011 2010 Branches 123 106
2- Principles of consolidation
a) The consolidated financial statements incorporate the assets, liabilities and results of all subsidiaries controlled by the Bank. Subsidiaries are fully consolidated from the date on which control commences and are de-consolidated from the date control ceases.
b) The purchase method of accounting is used to account for the acquisition of the subsidiaries.
c) Goodwill on the acquisition of businesses being the excess of purchase consideration over the fair value of the Group’s share of identifiable net assets of the acquired business; is amortized over 10 years on a straight line basis
d) The parent’s shares acquired by the subsidiaries are recorded at cost in the subsidiary’s accounts. These shares are deducted from the parent’s equity in the consolidated financial statements.
The subsidiaries subject to consolidation are:
Shareholding Saman Exchange Co. 71% Saman Satellite Communications Group 65% Iranian Credit Bureau & Scoring Co. 98%
76 3- Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below:
3-1- Accounting convention
The consolidated financial statements of the Group and the Bank have been prepared under the historical cost convention and in accordance with Iranian Accounting Standards and the CBI’s monetary and banking regulations.
3-2- Foreign currency translation
• Monetary assets and liabilities are converted at the prevailing rate on a daily basis and exchange differences, if any, are provided in the accounts. • Non-monetary assets and liabilities are recorded at the historical rates at the time of recording transactions in the accounts.
3-3- Investment
• Long-term investments are valued at cost less provision made for any permanent reduction in their values. • Short-term liquid investments are valued at the lower of cost and market value at the portfolio level and other short-term investments are valued at the lower of cost and market value of each investment.
3-4- Tangible fixed assets
Tangible fixed assets are stated at cost and depreciated at the rates and bases in accordance with the Iranian Direct Taxation Act of 1988 as amended (the Tax Act) as follows:
Asset Depreciation rate Basis Buildings 7 % and 12% Reducing balance Fixtures and fittings (including computer hardware) 3, 5 and 10 years Straight line Motor vehicles 25% Reducing balance ATMs and POS terminals 5 years Straight line Satellite installations 4, 5 and 10 years Straight line
Major repairs and improvements which extend the useful life of assets are capitalised whereas minor repairs are charged to the profit and loss account as incurred.
In accordance with the provisions of the Iranian Direct Taxation Act, depreciation is charged from the month following the date when an asset is brought into use. When assets are not used during the year, depreciation is charged at the rate of 30% of normal depreciation.
3-5- Intangible fixed assets
Intangible fixed assets are recorded in the accounts at cost. Key money is not depreciated but computer software is depreciated in a straight line basis over 3 years.
3-6- Revenue recognition
a) Interest Income- Loan interest income is recognised on an accrual basis and after taking into account the likelihood of future recoverability of benefits.
b) Investment Income- Dividends from subsidiaries not consolidated are recognised as income in the year in which the subsidiaries’ annual general meetings (AGMs) approved the payment of dividend. Whilst in the case of other investments, income is only recognised once approved by the investees’ AGMs held prior to the Bank’s year-end.
77 FINANCIAL STATEMENTS 2010/11
3-7- Depositors’ share of profit
Under the CBI’s regulations, in addition to interest payable to depositors, they are also entitled to a share of profit of the Bank’s net interest and investment income. The Bank receives a commission from depositors based on total interest paid to them.
3-8- Provisions for doubtful debts
Provisions for bad and doubtful debts are provided in accordance with the CBI’s regulations as follows:
a) General provision- amounting to 1.5% of the total loan portfolio.
b) Specific provision- depending on the severity of the non-performing loans including the period of irregularity, the Bank provides specific provision ranging from 10% to 100% of the shortfall in the balance of each loan after allowing for collaterals and general provision in (a) above.
3-9- Staff termination benefits
Staff termination benefits are provided at the rate of one month salary for each year of service.
4- Cash
The details of cash balances are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Rials 816,077 390,693 815,717 390,173 Foreign currencies 180,625 64,145 179,952 64,085 Others 6 - - - Total 996,708 454,838 995,669 454,258
5- Due from the CBI
The balance due from the CBI comprises:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Statutory deposit 5,004,289 4,285,659 5,004,289 4,285,659 Current account balances 389,791 298,820 389,791 298,820 Short term foreign currency deposits 712,932 319,798 712,932 319,798 Others 7,834 - 7,834 - Total 6,114,846 4,904,277 6,114,846 4,904,277
78 6- Due from other financial institutions
The details of deposits held with other financial institutions are as follows:
Consolidated Parent entity Notes 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) In foreign currency Foreign banks Current accounts 6-1 2,656,675 1,795,017 2,656,675 1,795,017 Term deposits 1,307,766 405,000 1,307,766 405,000
Local banks Current accounts 632,345 85,962 632,345 85,962 Term deposits 1,395,930 - 1,395,930 - 5,992,716 2,285,979 5,992,716 2,285,979
In Rials Local banks Current accounts 41,533 25,864 41,519 25,844 Term deposits 6-2 944,799 421,832 926,988 415,043 Others 1,156,623 1,322,324 1,156,623 1,322,324 2,142,955 1,770,020 2,125,130 1,763,211
Total 8,135,671 4,055,999 8,117,846 4,049,190
6-1- The details of foreign currency deposits with local and foreign banks are as follows:
Foreign banks 2011 2010 Currency Rls (m) Currency Rls (m) Euro 338,340,375 4,971,574 80,986,497 1,093,318 Japanese Yen 2,233,264,295 287,131 237,421,827 25,862 UAE Dirham 85,384,105 240,954 340,641,854 912,239 Pound Sterling 13,319,522 224,141 14,257,064 214,597 US Dollar 15,258,198 158,135 2,334,706 22,959 Australian Dollar 12,748 132 236,019 2,143 Swiss Franc 605,015 6,958 1,497,542 13,960 SA Rial - - 26,250 69 Canadian Dollar - - 85,543 832 Korean Won 8,707,276 80,107 - - Turkish Lira 2,032,369 13,342 - - Chinese Yuan 4,408,850 6,957 - - Russian Rouble 9,000,000 3,285 - - Total 5,992,716 2,285,979
79 FINANCIAL STATEMENTS 2010/11
7- Loans
7-1- The details of loans net of provision for bad and doubtful debts are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Credit sale contracts 822,616 813,225 822,616 813,225 Service contracts 415,310 376,512 415,310 397,603 Hire purchase contracts 207,818 273,302 207,818 273,302 Advance payment contracts 23,036 24,778 23,036 24,778 Interest free loans 599,632 265,174 599,632 265,174 Profit sharing contracts 13,684,819 10,174,542 13,728,772 10,230,626 Equity participation contracts 24,602,206 17,639,318 24,685,918 17,713,264 Factoring 9,372,837 971,380 9,372,837 971,380 Foreign currency loans 215,662 88,745 215,662 88,745 Paid L/Cs 94,064 6,251 94,064 6,251 Doubtful paid L/Cs 970,568 449,466 970,568 449,466 Paid guarantees 7,270 32,333 7,270 32,333 Doubtful guarantees 80,188 58,963 80,188 58,963 Terms L/Cs and drafts 9,022,259 2,858,454 9,022,259 2,858,454 Total 60,118,285 34,032,443 60,245,950 34,183,564
7-2- The analysis of loan portfolio based on the CBI’s regulations is as follows:
Parent entity Loan Type Current Past due Outstanding Doubtful Total Credit sale contracts 990,458 4,589 10,122 325,152 1,330,321 Service contracts 351,332 3,156 9,086 194,376 557,950 Hire purchase contracts 223,847 2,362 8,447 63,651 298,308 Advance payment contracts 2,110 - - 32,484 34,594 Interest free loans 608,685 39 52 501 609,277 Profit sharing contracts 10,592,723 545,466 1,949,657 1,432,443 14,520,288 Equity participation contracts 20,514,019 1,456,227 3,283,938 1,465,031 26,635,503 Factoring 10,252,514 364 - 8,192 10,261,070 Short and long term credit facilities 229,318 - - - 229,318 Paid L/Cs 99,240 - - 1,186,466 1,285,706 Paid guarantees 9,591 - - 116,088 125,679 Future interest and commission (3,110,481) - - - (3,110,481) General provision (701,106) - - - (701,106) Specific provision (1,073,842) - - - (1,073,842) Term L/Cs and drafts 9,159,653 - - - 9,159,653 Total 48,148,061 2,012,203 5,261,302 4,824,384 60,245,950
80 7-3- The analysis of loans by interest rate and maturity is as follows:
Interest 12% or 12% to 15% to 18% to 21% to 24% or Total Maturity less 15% 18% 21% 24% more Past-due 188,343 3,774 49,167 16,742 251,818 11,588,045 12,097,889 2 months to Y/e 20.03.2011 1,030 390 60,592 - 20,674 4,708,124 4,790,810 Y/e 20.03.2012 7,692,405 73,089 173,664 918,084 2,670,423 19,144,329 30,671,994 Y/e 20.03.2013 28,393 73,337 10,167 6,074 795,520 686,544 1,600,035 Y/e 20.03.2014 2,060 13,166 219,685 14,998 87,812 426,263 763,984 Y/e 20.03.2015 25,678 14,213 33,192 1,703 384,193 2,608,967 3,067,946 Y/e 20.03.2016 945 74,897 227 2,806 39,671 593,110 711,656 After 2016 670,180 44,870 333,071 8,116 863,676 347,498 2,267,411 Total 8,609,034 297,736 879,765 968,523 5,113,787 40,102,880 55,971,725
8- Participation bonds
The analysis of participation bonds by currency is as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Rials 1,383,325 863,800 1,383,325 863,800 Foreign currencies 1,954,302 675,000 1,954,302 675,000 Total 3,337,627 1,538,800 3,337,627 1,538,800
The Rial bonds interest rate is 15.5% to 18% pa and foreign currency bonds interest rate is 8% pa. In both cases interest is tax free.
The Rial bonds maturity dates are between January 2012 and January 2016 and the foreign currency bonds maturity dates are between March 2013 and June 2013.
9- Investments
The details of investments are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Long term Unlisted shares 55,108 39,342 270,741 183,135 Short term Listed shares 142,448 60,917 142,448 60,917 Fixed income units 15,000 15,000 15,000 15,000 Total 212,556 115,259 428,189 259,052
Fixed income units are held in Novin Saman Unit Trust, bearing an interest of at least 16.5 pa payable quarterly.
81 FINANCIAL STATEMENTS 2010/11
10- Investments in associated entities
The movements in investments, goodwill and share of total assets in associated entities are as follows:
Share of net assets Goodwill Share of total assets Rls (m) Rls (m) Rls (m) Opening balance 24,128 2,021 26,149 Additions 62,400 - 62,400 Share of associated entities’ earnings 7,111 - 7,111 Dividends (2,645) - (2,645) Goodwill amortisation - (339) (339) Closing balance 90,994 1,682 92,676
11- Tangible fixed assets
The details of tangible fixed assets are given in Appendix A.
12- Intangible assets
The details of intangible assets are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Key money 1,109,967 1,107,238 1,109,966 1,107,238 Software 14,503 13,015 14,137 12,737 Utility deposits 63,493 62,772 7,177 5,721 Others 763 763 - - Total 1,188,726 1,183,788 1,131,280 1,125,696
13- Goodwill
The details of goodwill on consolidation are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Cost Opening balance 38,673 38,262 - - Additions during the year - 411 - - Closing balance 38,673 38,673 - -
Amortisation - - Opening balance 10,563 6,696 - - Amortisation for the year 3,867 3,867 - - Closing balance 14,430 10,563 - -
Net book value 24,243 28,110 - -
82 14- Other assets
The details of other assets are as follows:
Note Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Trade receivables 14-1 121,318 122,502 - - Other receivables 14-2 304,544 189,764 357,609 193,769 Inventory 14-3 12,087 21,070 - - Prepayments 37,163 13,228 - - Others 14-4 2,896,586 1,353,399 2,962,508 1,454,950 Total 3,371,698 1,699,963 3,320,117 1,648,719
14-1- The details of trade receivables are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Rial receivables 145,258 134,152 - - Foreign currency receivables - 1,133 - - 145,258 135,285 - - Provision for doubtful debts (23,940) (12,783) - - Total 121,318 122,502 - -
14-2- The details of other receivables are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Dividends 10,472 9,314 17,275 13,616 Participation bonds income 89,263 17,118 89,263 17,118 Due from associated entities 3,079 - 58,429 3,890 Debt collection costs 116,518 80,149 116,518 80,149 Deposit interest receivable 18,482 - 18,482 - Others 87,282 107,562 78,154 103,264 325,096 214,143 378,121 218,037 Provision for doubtful debts (20,552) (24,379) (20,512) (24,268) Total 304,544 189,764 357,609 193,769
83 FINANCIAL STATEMENTS 2010/11
14-3- The details of inventory are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Inventory 11,207 19,880 - - Work in progress 880 1,190 - - Total 12,087 21,070 - -
14-4- The details of other assets are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Rent prepayments 128,703 135,449 128,703 135,449 Income tax prepayments 258,168 164,984 258,168 164,984 Foreclosed collaterals 2,352,360 937,009 2,391,738 976,388 Contract advances 72,305 35,432 98,849 97,604 Rent deposits 56,539 60,118 56,539 60,118 Others 28,511 20,407 28,511 20,407 Total 2,896,586 1,353,399 2,962,508 1,454,950
15- Due to the CBI
The details of the balance due to the CBI are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Foreign currency transactions 291,260 340,578 291,260 340,578 CBI’s long term deposits 3,644,300 - 3,644,300 - Foreign currency loans 219,100 90,096 219,100 90,096 Total 4,154,660 430,674 4,154,660 430,674
84 16- Due to other financial institutions
The details of amounts due to other financial institutions are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) In foreign currency Foreign banks Call deposits 147,521 146,847 147,521 146,847 Term deposits 180,608 - 180,608 -
Local banks Call deposits 712,503 425,950 712,503 425,950 Term deposits 2,788,744 689,805 2,788,744 689,805 3,829,376 1,262,602 3,829,376 1,262,602 In Rials Local banks Call and term deposits 4,769,386 1,124,468 4,769,386 1,124,468 Loans 2,694 - - - Interbank deposits 2,000,000 - 2,000,000 - 6,772,080 1,124,468 6,769,386 1,124,468
Total 10,601,456 2,387,070 10,598,762 2,387,070
17- Customer deposits
The details of customer deposits are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Call deposits 3,619,018 2,723,652 3,620,265 2,723,796 Non-interest bearing deposits 1,347,777 259,774 1,347,777 259,774 Term deposits 48,175,106 35,922,986 48,228,136 35,927,728 Total 53,141,901 38,906,412 53,196,178 38,911,298
17-1- The details of term deposits, maturity and interest rates are as follows:
Parent entity Type Interest rate % 2011 Interest rate % 2010 Short term 6.0 to 10.0 20,507,730 9.0 to 12.0 14,321,076 One year 14.0 3,115,499 14.5 5,308,545 2 years 14.5 419,052 15.5 680,362 3 years 15.0 473,733 16.0 453,491 4 years 16.0 166,101 17.0 168,772 5 years 17.0 23,546,021 17.5 14,995,482 Total 48,228,136 35,927,728
85 FINANCIAL STATEMENTS 2010/11
18- Other deposits
The details of other deposits are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Guarantees issuing deposits 216,561 189,038 218,110 190,538 L/C cash advances 1,731,006 925,361 1,731,006 925,361 Draft cash advances 26,920 26,984 26,920 26,984 Others 16,903 16,962 16,903 16,962 Total 1,991,390 1,158,345 1,992,939 1,159,845
19- Other liabilities
The balance comprises:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) L/Cs and drafts 9,159,653 2,889,170 9,159,653 2,889,170 Accrued interest - local depositors 558,233 328,984 558,233 328,984 Dividends 473 12,881 347 12,541 Others 372,263 204,042 205,561 147,131 Total 10,090,622 3,435,077 9,923,794 3,377,826
20- Taxation
The Bank’s tax position is as follows:
a) Financial years 2007, 2005 and prior years
The Bank’s tax liability for these years has been finalised and settled.
b) Financial year 2006
The Bank’s 2006 income tax, based on the declared profit, was Rls 10,197m, whilst the final tax assessment issued by the Tax Authorities was Rls 61,097m. The Bank has paid the tax but protested the assessment and the matter is yet to be decided by the High Council of Taxation (HCT). The amount paid has been treated as prepayment; hence no provision has been made for any potential tax liability, as the outcome of the Bank’s protest has not yet been determined.
c) Financial year 2008
The Bank made no tax provision for the year as there was no taxable income after allowing for tax-exempt income. However, the Tax Authorities raised a tax assessment amounting to Rls 128,439 m. The Bank has protested the assessment, but paid Rls 50,000m as tax advance. However, the matter is yet to be decided by the HCT. No provision has been made for any potential tax liability as the final amount of tax cannot be determined.
86 d) Financial year 2009
The 2009 income tax based on the declared profit was Rls 23,700m, whilst the tax assessment issued by the Tax Authorities was Rls 168,495m. The Bank has protested the assessment and the matter is yet to be decided by the Tax Authorities. No provision has been made for any potential tax liability, as the amount of tax cannot be determined.
e) Financial years 2010 and 2011
The 2010 and 2011 income taxes have been provided on the basis of declared profit amounting to Rls 91,973m and Rls 160,303m, respectively. However, the tax assessments for these years are yet to be raised by the Tax Authorities.
21- Provision for staff termination benefits
Movements in provision for staff termination benefits during the year were as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Balance at beginning of the year 35,503 22,285 34,749 21,915 Paid during the year (3,440) (1,588) (3,036) (1,400) Provision for the year 24,092 14,806 23,167 14,234 Balance at end of the year 56,155 35,503 54,880 34,749
22- Share capital
22-1- The Bank’s share capital was increased during the year from Rls 1,800,000m to Rls 3,000,000m, comprising 3,000m shares of Rls 1,000 fully paid.
22-2- The composition of shareholders at the year-end was as follows:
No. Share capital % holding Rls (m) Individuals 3,006 1,766,416 58.9 Legal entities 54 1,233,584 41.1 Total 3,060 3,000,000 100
22-3- The details of minority shareholders’ interests are as follows:
2011 2010 Rls (m) Rls (m) Share capital 33,920 33,600 Legal reserve 1,272 894 Profit (loss) (4,484) (6,226) Total 30,708 28,268
87 FINANCIAL STATEMENTS 2010/11
23- Legal reserve
In accordance with the provisions of the “Monetary and Banking Law”, banks are required to set aside 15% of net profit as legal reserve. The movements in the legal reserve during the year were as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Balance at beginning of the year 389,064 270,597 387,289 269,371 Transfer during the year 227,960 118,467 227,242 117,919 Balance at end of the year 617,024 389,064 614,531 387,290
24- Loan interest income
The balance of loan interest income comprises:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Loan interest 6,170,152 5,227,372 6,193,562 5,259,204 Late payment penalties 45,161 87,686 45,976 87,740 Total 6,215,313 5,315,058 6,239,538 5,346,944
24-1- The analysis of loan interest by loan type is as follows:
Consolidated Parent entity Loan type 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Credit sale contracts 91,895 89,851 91,895 89,890 Equity participation contracts 3,922,031 3,001,816 3,934,106 3,015,797 Profit sharing contracts 2,076,180 2,024,613 2,087,515 2,042,392 Advance payment contracts 611 1 611 1 Service contracts 37,339 59,274 37,339 59,307 Hire purchase contracts 42,096 51,817 42,096 51,817 Total 6,170,152 5,227,372 6,193,562 5,259,204
88 25- Investment and deposit income
The details of investment and deposit income are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Participation bonds 363,841 307,426 363,841 307,426 Statutory deposit 47,071 44,375 47,071 44,375 Deposits with local banks (in Rials) 207,014 245,874 206,563 245,662 Investment valuation - - - Dividends and partnership income 130,372 41,162 136,586 42,632 Interest on other facilities 533,566 440,675 534,282 440,675 Interest on foreign currency loans 641,993 133,652 643,890 141,519 Interest on foreign currency deposits with local banks 53,898 - 53,898 - Interest on term deposits with foreign banks 1,814 568 1,814 568 Profit on sale of foreign currency notes 128,531 1,479 128,531 1,479 Total 2,108,100 1,215,211 2,116,475 1,224,336
26- Foreign exchange income
The analysis of foreign exchange income and expenses is as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Foreign exchange income Sale of foreign currency (*) 6,009,558 626,231 - - Bank 383,647 92,781 388,965 103,747 Total 6,393,205 719,012 388,965 103,747 Foreign exchange expenses Purchase of foreign currency (*) 5,971,448 597,959 - - Bank - - - - Total 5,971,448 597,959 - -
(*) Saman Exchange Co. (subsidiary)
89 FINANCIAL STATEMENTS 2010/11
27- Other income
The details of other income are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) L/Cs and drafts 225,480 79,962 225,486 80,706 Guarantees 27,948 22,699 28,223 22,969 ATM fees (Shetab) 104,362 63,804 104,362 63,804 Commission on interest-free loan 5,102 3,610 5,102 3,610 Card issuing fees 1,987 1,655 1,987 1,655 Managed funds 107 124 107 124 Collateral valuation fees 5,876 5,356 5,876 5,356 Insurance and loan monitoring fees 100 179 100 179 Loan professional fees 19,292 22,251 19,331 22,349 Telecommunications 957 1,556 957 1,568 Profit on sale of fixed assets 19,031 72,535 - 72,535 Others 118,517 85,403 125,597 92,828 Total 528,759 359,134 517,128 367,683
28- Other interest
The details of other interest are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Foreign currency term deposits 302,651 52,803 302,651 52,803 Total 302,651 52,803 302,651 52,803
29- General and administrative expenses
The details of these expenses are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Personnel 336,756 282,053 329,042 272,385 Administration 576,040 458,497 566,386 443,180 Total 912,796 740,550 895,428 715,565
90 30- Commission expenses
The details of commission paid are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Brokers 9,570 1,657 9,570 1,657 Banks 3,232 6,109 3,232 6,109 Individuals 79,949 84,106 85,220 84,106 ATM operator (Shetab) 80,236 54,336 80,236 54,336 Others 229 2,488 229 2,488 Total 173,216 148,696 178,487 148,696
31- Off balance sheet items
The details of off balance sheet commitments are as follows:
Parent entity 2011 2010 Rls (m) Rls (m) L/C commitments: Commitments for L/Cs opened 2,586,775 2,342,945 Commitments for drafts 271,022 289,445 2,857,797 2,632,390 Guarantee commitments: Guarantees issued 2,173,999 1,703,639
Other commitments: Other commitments 1,823,320 1,318,869
Total 6,855,116 5,654,898
32- Cash flow from operating activities
The details of cash flow from operating activities are given in Appendix B.
91 FINANCIAL STATEMENTS 2010/11
33- Cash balance at the year-end
The details of cash balance at the year-end are as follows:
Consolidated Parent entity 2011 2010 2011 2010 Rls (m) Rls (m) Rls (m) Rls (m) Cash 996,708 454,838 995,669 454,259 Foreign currency deposits with foreign banks 3,636,312 2,053,170 3,636,312 2,053,170 Current accounts with other banks 41,514 25,863 41,519 25,844 Foreign currency current accounts with local banks 2,028,275 85,962 2,028,275 85,962 Current accounts with the CBI 385,763 298,820 389,791 298,820 Short term deposits with the CBI - 11,000 - 11,000 Foreign currency deposits with the CBI 712,932 308,798 712,932 308,798 Foreign currency current accounts with foreign banks 942,494 421,832 926,988 415,043 Balance at the year-end 8,743,998 3,660,283 8,731,486 3,652,896
34- Contingent liabilities and capital commitments
34-1- Except for tax liabilities and off balance sheet commitments stated in Notes 20 and 31 respectively, there are no other known material contingencies at the balance sheet date.
34-2- The Bank’s capital commitments at the year-end were in relation to renovation and repair of newly purchased branches in Tehran and other cities.
35- Post balance sheet events
There was no event after the balance sheet date which would require adjustment to the financial statements.
92 36- Related party transactions
The details of related party transactions are as follows:
Facilities:
Company name Relationship Facilities Rls (m) Saman Insurance Co. CBM Commitments 1,716 Saman Brokerage Co. CBM Commitments 139 Saman Electronic Payment Co. CBM Commitments 41,884 Pelastiran Co. CBM Loans 4,000 Yazdbaf Co. CBM Commitments 26,139 Hamedan Glass Co. CBM Commitments 1,089 Saman Exchange CBM Loans 79,440 Pompiran Co. Shareholder Loans 20,000 Mr. Zarrabieh BM Loans 17,124
CBM = Common Board Member BM = Board Member
37- Capital adequacy
The Bank’s capital adequacy ratio is as follows:
Parent entity 2011 2010 Rls(m) Rls(m) Tier I Share capital 3,000,000 1,800,000 Legal reserve 614,531 387,289 Retained earnings 1,216,101 734,450 Total tier I capital 4,830,632 2,921,739
Tier II General provisions 701,106 455,401 Less: adjustments for 1.25% of risk-weighted assets (3,257) (62,929) Total tier II capital 697,849 392,472
Total tier I and tier II capital 5,528,481 3,314,211
Risk-weighted assets 55,827,917 31,397,772
Capital adequacy ratio 9.90% 10.56%
The CBI requires a minimum capital adequacy ratio of 8%.
93 FINANCIAL STATEMENTS 2010/11 Rls (m) (7,905) (1,334) 339,713 162,614 283,530 493,088 (16,362) (16,880) 1,877,376 1,287,375 1,627,088 1,384,288 Total ------Rls (m) 175,093 172,033 172,033 102,127 102,127 (244,999) Capex prepayments Rls (m) (7,905) (1,334) 339,713 162,614 108,437 228,637 493,088 (16,880) 1,775,249 1,115,342 1,282,161 1,455,055 Total - - Rls (m) 7,696 4,782 1,157 2,641 4,131 (236) (503) 5,052 3,565 9,834 Motor vehicles Rls (m) (598) 17,335 (3,732) (5,377) 103,972 701,536 302,973 103,866 382,169 398,563 203,437 585,606 Office furniture and equipment Consolidated Rls (m) (736) 57,591 88,461 (3,937) 124,177 793,746 132,145 592,108 185,063 459,963 608,683 (11,000) Buildings ------488 Rls (m) 270,133 270,133 269,645 269,645 Land 2011 2010 . .
03 03 . . 2010 2011 2010 2011 . . . . 03 03 03 03 . . . . Fixed assets: Fixed details of fixed assets are as follows: The Additions Adjustments Disposals Cost: Balance at 20 Balance at 20 Balance at 20 Balance at 20 Net book value at 20 Net book value at 20 Depreciation for the year Disposals Depreciation: Adjustments Appendix A Appendix Fixed assets are fully insured against fire and earthquake.
94 Rls (m) (5,877) (1,318) (3,968) 240,877 470,024 154,920 320,390 (16,361) 1,151,618 1,472,008 1,220,623 1,690,647 Total ------Rls (m) 66,927 66,927 157,201 154,725 154,725 (244,999) Capex prepayments Rls (m) 83,676 (5,877) (1,318) (3,968) 470,024 154,920 228,638 320,390 996,893 1,317,283 1,623,720 1,153,696 Total - - Rls (m) 7,475 1,141 4,734 3,974 4,879 9,613 2,641 3,501 (236) (503) Motor vehicles - Rls (m) (582) 96,676 (3,732) (5,374) 103,972 190,151 336,135 618,648 282,513 520,050 329,899 Office furniture and equipment Parent entity Parent - - Rls (m) (736) 57,103 81,035 567,755 418,910 124,177 750,387 545,175 126,265 182,632 Buildings ------489 Rls (m) 245,072 245,072 244,583 244,583 Land
2011 2010 . .
03 03 . . 2010 2011 2010 2011 . . . . 03 03 03 03 . . . . Fixed assets: Fixed details of fixed assets are as follows: The Depreciation: Depreciation for the year Disposals Cost: Balance at 20 Balance at 20 Balance at 20 Balance at 20 Net book value at 20 Net book value at 20 Additions Adjustments Adjustments Disposals Appendix A Appendix Fixed assets are fully insured against fire and earthquake.
95 FINANCIAL STATEMENTS 2010/11
Appendix B
Cash flow from operating activities
Consolidated Parent entity 2011 2010 2011 2010 Rls.(m) Rls.(m) Rls.(m) Rls.(m) Profit before tax 1,509,444 833,011 1,514,946 879,081 Adjusted for: Profit on sale of fixed assets (19,031) (72,535) - (72,535) Depreciation 172,664 156,170 159,627 141,759 Provision for staff termination benefits 20,652 13,218 20,131 12,833 Provision for bad and doubtful debts 467,570 230,539 456,698 235,195 Net profit – adjusted for non-cash items 2,151,299 1,160,403 2,151,402 1,196,333
Net increase/(decrease) in operating liabilities Due to the CBI 3,594,982 (493,828) 3,594,982 (493,828) Due to other financial institutions 8,030,410 672,540 8,030,410 676,439 Deposits 14,235,489 5,841,913 14,284,879 5,841,479 Other deposits 833,044 41,884 833,094 40,099 Other liabilities 6,619,139 710,065 6,438,245 789,100 33,313,064 6,772,574 33,181,610 6,853,289
Net increase/(decrease) in operating assets Balance with the CBI (560,764) 589,465 (560,764) 589,465 Loans (26,553,413) (7,114,237) (26,522,840) (7,133,265) Participation bonds (1,798,827) (928,975) (1,798,827) (928,975) Investments (162,645) (1,743) (169,137) (1,201) Other assets (1,561,295) (351,014) (1,481,725) (448,164) (30,636,944) (7,806,504) (30,533,293) (7,922,140)
Net cash flow from operating activities 4,827,419 126,473 4,799,719 127,482
96 97 ANNUAL REPORT 2010/11
98 SAMAN BANK BRANCH NETWORK
99 ANNUAL REPORT 2010/11 SAMAN BANK BRANCH NETWORK
TEHRAN BRANCH NETWORK
# Branch Branch code Telephone Fax SWIFT code 1 Africa 801 +98 21 8887 4458 +98 21 8877 3773 SABCIRTH8AF 2 Central 802 +98 21 6695 9050 +98 21 6696 4998 SABCIRTH8AL 3 Bagh-e Ferdows 804 +98 21 2274 5880 +98 21 2274 0887 SABCIRTH8BA 4 Pasdaran 805 +98 21 2259 5657 +98 21 2256 7540 SABCIRTH8PA 5 Bazaar 806 +98 21 5557 6492 +98 21 5557 6495 SABCIRTH8BZ 6 Sadeghieh 807 +98 21 4425 4518 +98 21 4425 4517 SABCIRTH8SA 7 Aghdasieh 808 +98 21 2282 1919 +98 21 2282 2223 SABCIRTH8AG 8 Mirdamad 809 +98 21 2292 4451 +98 21 2292 4463 SABCIRTH8MD 9 Dr. Fatemi 810 +98 21 8898 2181 +98 21 8898 2194 SABCIRTH8FA 10 Saadat Abad 811 +98 21 2208 6191 +98 21 2208 7708 SABCIRTH8SD 11 Jannat Abad 812 +98 21 4449 5201 +98 21 4449 5228 SABCIRTH8JA 12 Dowlat 813 +98 21 2276 4282 +98 21 2276 0338 SABCIRTH8DT 13 Vanak Sq. 814 +98 21 8820 5455 +98 21 8820 5448 SABCIRTH8VN 14 Iran Zamin 815 +98 21 8857 7605 +98 21 8857 1215 SABCIRTH8IZ 15 Arikeh Iranian 816 +98 21 2235 9275 +98 21 2235 3516 SABCIRTH8AI 16 Yaft Abad 817 +98 21 6621 1014 +98 21 6623 7110 SABCIRTH8YF 17 Shahr-e Ray 818 +98 21 5597 0738 +98 21 5597 0730 …………. 18 Pol-e Roomi 819 +98 21 2221 3194 +98 21 2221 3195 SABCIRTH8PR 19 North Africa 820 +98 21 8877 3152 +98 21 8877 3151 SABCIRTH8NA 20 Jam-e Jam 821 +98 21 2621 0912 +98 21 2621 0917 SABCIRTH8JJ 21 Piroozi 822 +98 21 3332 3141 +98 21 3332 3143 SABCIRTH8PI 22 Velenjak 823 +98 21 2242 1227 +98 21 2217 2590 SABCIRTH8VJ 23 Azarbaijan 824 +98 21 6606 7884 +98 21 6606 7880 SABCIRTH8AZ 24 Shahrak-e Ekbatan 825 +98 21 4463 6318 +98 21 4465 6896 SABCIRTH8EK 25 Argentine Sq. 826 +98 21 8851 7420 +98 21 8851 7381 SABCIRTH8AJ 26 Ekbatan - Mellat 827 +98 21 3399 8004 +98 21 3399 8009 SABCIRTH8ME 27 Gheytarieh 828 +98 21 2223 4056 +98 21 2223 4258 SABCIRTH8QE 28 Molla Sadra 829 +98 21 8806 9257 +98 21 8806 9254 SABCIRTH8ML
100 # Branch Branch code Telephone Fax SWIFT code 29 Seyed Jamaledin Asad Abadi 830 +98 21 8805 5461 +98 21 8861 0295 SABCIRTH8JM 30 Qazvin Sq. 831 +98 21 5548 1172 +98 21 5548 1179 ………… 31 Dr. Beheshti 832 +98 21 8851 2603 +98 21 8874 6699 SABCIRTH8BH 32 Kargar-e Shomali 833 +98 21 8899 1348 +98 21 8899 1350 SABCIRTH8NK 33 Tehran Pars - Falakeye 3 834 +98 21 7737 0113 +98 21 7737 0441 SABCIRTH8TP 34 Park Saee - Vali Asr 835 +98 21 8870 9481 +98 21 8855 6966 SABCIRTH8PS 35 Tehran Pars - Falakeye 1 836 +98 21 7772 3251 +98 21 7772 3255 SABCIRTH8FT 36 Bazaar Kafashha 837 +98 21 5515 1805 +98 21 5561 6073 …………… 37 Elahiyeh 838 +98 21 2620 3470 +98 21 2202 7930 SABCIRTH8EL 38 Moniriyeh 839 +98 21 6649 1076 +98 21 6649 1073 SABCIRTH8MO 39 Shahrak-e Rah Ahan 840 +98 21 4473 8969 +98 21 4473 7888 …………… 40 Nabovat Sq. 841 +98 21 7794 0429 +98 21 7794 0418 SABCIRTH8NB 41 Terminal 4, Mehrabad Airport 843 +98 21 4469 0118 +98 21 4469 0119 …………… 42 Shahran 844 +98 21 4431 2955 +98 21 4430 3691 …………… 43 Ferdows Blvd. 845 +98 21 4400 0285 +98 21 4400 6826 …………… 44 Imam Khomeini Airport 846 +98 21 5567 8411 +98 21 5567 8410 …………… 45 Tajrish, Darbandi St. 847 +98 21 2273 2145 +98 21 2271 9056 …………… 46 Nazi Abad 848 +98 21 5533 3484 +98 21 5533 3483 …………… 47 Si-e Tir 849 +98 21 6675 0412 +98 21 6675 0236 SABCIRTH8ST 48 Mahan Airline Counter 851 +98 21 4838 1491 +98 21 4838 1396 SABCIRTH8MN 49 Terminal 2, Mehrabad Airport 852 +98 21 4465 9103 +98 21 4466 2252 SABCIRTH8FM 50 Farjam 853 +98 21 7723 0744 +98 21 7722 8362 SABCIRTH8FJ 51 Molavi 854 +98 21 5515 9347 +98 21 5515 4729 SABCIRTH8MV 52 Lavasani 855 +98 21 2281 6691 +98 21 2281 6689 SABCIRTH8LA 53 Tehransar 856 +98 21 4451 7556 +98 21 4451 6662 …………… 54 Hyperstar 857 +98 21 4416 7182 +98 21 4416 7199 SABCIRTH8HS 55 Asef 858 +98 21 2243 1976 +98 21 2243 2692 SABCIRTH8AS 56 Hossein Abad Sq. 859 +98 21 2295 9959 +98 21 2295 9909 SABCIRTH8HA 57 Ekhtiarieh 860 +98 21 2277 6613 +98 21 2277 6571 SABCIRTH8ET 58 Evin 861 +98 21 2243 2419 +98 21 2243 2426 SABCIRTH8EV 59 Valiasr - Zartosht 862 +98 21 8880 6178 +98 21 8880 7592 SABCIRTH8ZV 60 Dezashib - Ammar 863 +98 21 2275 3914 +98 21 2275 3913 ………… 61 Bours-e Kala 864 +98 21 8838 3496 +98 21 8838 3498 ………… 62 Jomhouri - Aboureyhan 865 +98 21 6647 7666 +98 21 6647 7655 ………… 63 Sarv 866 +98 21 2214 5763 +98 21 2214 5832 ………… 64 Dehkadeh Olympic 867 +98 21 4471 5055 +98 21 4471 1782 ………… 65 Qolhak 868 +98 21 2660 1505 +98 21 2660 1509 SABCIRTH8GL 66 Satarkhan 869 +98 21 6693 6228 +98 21 6657 2865 ………… 67 Pounak 870 +98 21 4446 2583 +98 21 4446 2815 ………… 68 Ajudanieh 871 +98 21 2614 1197 +98 21 2612 4185 ………… 69 Karaj, Jahanshahr 901 +98 261 446 6115 +98 261 448 1445 SABCIRTH9JK 70 Karaj, Tohid Sq. 902 +98 261 220 6470 +98 261 225 4862 SABCIRTH8KJ 71 Karaj Stock Exchange 903 +98 261 277 0195 +98 261 277 0196 ………… 72 Shahriar 904 +98 262 326 8963 +98 262 326 8962 SABCIRTH9SR
101 ANNUAL REPORT 2010/11 SAMAN BANK BRANCH NETWORK
REGIONAL BRANCH NETWORK
# Branch Branch code Telephone Fax SWIFT code 1 Isfahan 803 +98 311 223 0424 +98 311 223 0428 SABCIRTH9ES 2 Qom 9001 +98 251 290 3240 +98 251 291 6616 SABCIRTH9QM 3 Shiraz 9101 +98 711 231 9521 +98 711 231 9513 SABCIRTH9SH Shiraz, Gas Jam-e Jam 4 9102 +98 711 226 2852 +98 711 227 4834 SABCIRTH9FS Roundabout 5 Shiraz, Ghasrodasht 9103 +98 711 647 1669 +98 711 647 1678 SABCIRTH9GS 6 Shiraz, Mirzaye Shirazi Blvd. 9104 +98 711 625 4046 +98 712 623 9093 SABCIRTH9MI 7 Shiraz, Bazaar-e Vakil 9105 +98 711 223 3851 +98 711 223 3834 SABCIRTH9VS 8 Bandar Abbas 9121 +98 761 223 5302 +98 761 223 5330 SABCIRTH9BS 9 Zahedan 9131 +98 541 326 0178 +98 541 326 3282 SABCIRTH9ZN 10 Bushehr 9141 +98 771 556 2319 +98 771 556 2325 SABCIRTH9BR 11 Qazvin 9201 +98 281 335 7305 +98 281 335 8095 SABCIRTH9GH 12 Hamedan 9221 +98 811 821 3290 +98 811 821 3289 SABCIRTH9HA 13 Hamedan, Khajeh Rashid 9222 +98 811 252 7326 +98 811 252 7338 ******** 14 Kermanshah 9241 +98 831 725 9959 +98 831 725 9971 SABCIRTH9KM 15 Yasuj 9251 +98 741 223 5348 +98 741 223 5375 ******** 16 Ilam 9261 +98 841 335 0205 +98 841 334 8257 ******** 17 Sanandaj 9271 +98 871 324 5428 +98 871 324 5426 SABCIRTH9SN 18 Mashhad 9301 +98 511 844 4460 +98 511 844 3914 SABCIRTH9MA 19 Mashhad, Moddares 9302 +98 511 228 3801 +98 511 224 1046 SABCIRTH9MM 20 Mashhad, Sajad Blvd. 9303 +98 511 764 8208 +98 511 767 4046 SABCIRTH9SM 21 Bojnourd 9321 +98 584 224 7346 +98 584 224 7348 ******** 22 Birjand 9341 +98 561 444 5065 +98 561 444 6707 ******** 23 Rasht, Golsar 9401 +98 131 722 4710 +98 131 722 4713 SABCIRTH9RA 24 Sari 9402 +98 151 325 9762 +98 151 325 9761 SABCIRTH9SY 25 Babol 9421 +98 111 219 7142 +98 111 219 7148 SABCIRTH9BL 26 Tonekabon 9422 +98 192 421 0260 +98 192 421 0274 ********
102 # Branch Branch code Telephone Fax SWIFT code 27 Amol 9431 +98 121 223 0751 +98 121 223 0748 SABCIRTH9AM 28 Gorgan 9441 +98 171 236 9001 +98 171 226 9012 SABCIRTH9GO 29 Gonbad Kavoos 9442 +98 172 224 0612 +98 172 224 0624 ******** 30 Kerman 9501 +98 341 223 3386 +98 341 226 7960 SABCIRTH9KE 31 Kerman, Kowsar Sq. 9502 +98 341 247 6640 +98 341 247 6765 ******** 32 Rafsanjan 9511 +98 391 322 2104 +98 391 322 2101 ******** 33 Isfahan, Zayandeh Rood 9521 +98 311 628 2572 +98 311 626 9409 SABCIRTH9ZE 34 Isfahan, Chahar Bagh Bala 9522 +98 311 629 1324 +98 311 629 1329 SABCIRTH9CH 35 Isfahan, Hafez 9523 +98 311 220 9476 +98 311 223 7426 ******** 36 Yazd 9541 +98 351 622 8700 +98 351 626 9525 SABCIRTH9YZ 37 Yazd, Jomhouri Sq. 9542 +98 351 524 8203 +98 351 524 8206 SABCIRTH9JY 38 Arak 9561 +98 861 221 4404 +98 861 222 5957 SABCIRTH9AK 39 Tabriz 9601 +98 411 337 3800 +98 411 336 5160 SABCIRTH9TA 40 Tabriz, Vali-e Asr 9602 +98 411 332 7085 +98 411 331 9864 SABCIRTH9VT 41 Tabriz, 17th Shahrivar 9603 +98 411 557 3670 +98 411 557 3673 ******** 42 Tabriz, Shahriar 9604 +98 411 329 3262 +98 411 329 3260 SABCIRTH9TS 43 Tabriz, Bazaar 9605 +98 411 524 4049 +98 411 524 2623 SABCIRTH9BT 44 Orumieh 9621 +98 441 224 3668 +98 441 224 0392 SABCIRTH9OR 45 Orumieh, Sardaran 9622 +98 441 225 0522 +98 441 222 7846 SABCIRTH9SO 46 Ardebil 9641 +98 451 225 2601 +98 451 225 3501 SABCIRTH9AR 47 Ardebil, Shariati 9642 +98 451 225 4091 +98 451 225 4099 ******** 48 Zanjan 9681 +98 241 322 0654 +98 241 322 7733 SABCIRTH9ZA 49 Zanjan, North Saadi 9682 +98 241 526 8665 +98 241 526 8681 ******** 50 Ahwaz 9701 +98 611 392 0747 +98 611 392 0745 SABCIRTH9AH 51 Kish 9801 +98 764 445 2261 +98 764 445 2259 SABCIRTH9KI 52 Qeshm 9821 +98 763 524 2640 +98 763 524 2650 SABCIRTH9QM
103 ANNUAL REPORT 2010/11 ANNUAL REPORT 2010/11