Capital adequacy across Iran’s banking sector has improved, but the latest data reveal a sharply uneven distribution between stronger lenders and structurally weak institutions, highlighting ongoing risks in the system, Central Bank of Iran's data shows.

The sector’s capital adequacy ratio rose to 3.92% in 2025, recovering from negative levels in previous years, but still remains well below the regulatory minimum of 8%, which is required to safeguard depositors and ensure financial stability.

The latest breakdown shows that out of 18 banks, eight are now above the 8% threshold, while six remain below it and four continue to report negative capital adequacy ratios.

Among the strongest performers are Bank Mellat and Middle East Bank, both reporting ratios around 13%, followed by Saman Bank at around 10%. Other relatively solid institutions include Eghtesad Novin, Karafarin and Sina Bank, all maintaining ratios close to or above the regulatory benchmark.

In contrast, several banks remain undercapitalised. Bank Shahr and Bank Pasargad Iran are below the 8% requirement despite positive ratios, while the weakest performers include Bank Sarmayeh and Bank Dey, both reporting deeply negative ratios. Iran Zamin Bank also remains in negative territory based on central bank estimates, reflecting continued balance sheet stress.

The central bank has intensified its intervention in the sector. In November 2025, Ayandeh Bank, identified as the most imbalanced lender, was placed into resolution, marking a significant step in efforts to address systemic weaknesses.

Officials have described capital adequacy as a critical “defensive buffer” for absorbing losses. While the overall improvement suggests some success in regulatory tightening and restructuring, the wide divergence between banks indicates that vulnerabilities remain concentrated in a subset of institutions.

The data suggest that while parts of Iran’s banking system are stabilising, meaningful reform and recapitalisation will be required to bring the sector as a whole in line with regulatory standards.