Iran could face “a major banking crisis three or four years from now,” with a big increase in non-performing loans (NPLs), London-based consultancy Darien Analytics says in a new report on prospects for Iranian banks. 

Following years of exclusion from the international financial system, most Iranian banks have been left with “unsophisticated management controls and IT systems, accounting and auditing practices that are inconsistent and lax at recognizing NPLs,”...