Armenian banks in 2008: main events
Yerevan /Mediamax/. Despite the global financial-economic crisis, the year of 2008 was quite successful for Armenian banking system.
We decided to present the main events of the banking market in Armenia in the following categories:
- Attraction of external financing;
- New players, mergers and acquisitions;
- New tools.
Events, which were significant not only for individual banks, but also for Armenia’s financial market in general, are presented in the review composed.
Attraction of foreign financing
Despite the liquidity crisis raging in the world, in 2008, Armenian banks attracted impressive volumes of means from abroad, the most part of which was directed to small and medium enterprise crediting. Armenian government is now in process of negotiations with the World Bank on attracting up to $250mln of loan means in 2009 for small and medium enterprise financing.
In January, “ARARATBANK” and European Bank for Reconstruction and Development (EBRD) signed two agreements in Yerevan. Under the first agreement, the EBRD allocated a loan at the sum of $5mln for “ARARATBANK” to finance small and medium enterprise. The second agreement provided for allocation of $1mln, aiming at implementation of international trade financing technologies in the bank.
In October, EBRD purchased 25%+1 share of “ARARATBANK”.
In February, “Armeconombank” attracted a loan from the Black Sea Trade and Development Bank (BSTDB) at the sum of $5mln for small and medium enterprise financing. In February, the BSTDB allocated $3mln for “Inecobank” to finance exporters and companies, importing goods from BSTDB participant-states.
In March, member of KfW Banking Group – DEG Company (Deutsche Investitions-und Entwicklunsgesellschaft mbH), became the new shareholder of “Inecobank”, having purchased 13.5% of “Inecobank” shares from ShoreCap International. It was announced in April that “Inecobank” would receive a loan at the sum of $3mln from Belgian VDK Spaarbank, aiming at small and medium enterprise crediting.
In November, the Fund for International Development of the Organization of the Petroleum Exporting Countries (OPEC OFID) allocated two loan lines for “Inecobank” at the total sum of $5mln to fund trade and credit small and medium enterprise. In November, International Finance Corporation (IFC), entering the World Bank Group, allocated $5mln for “Inecobank”. The financial package comprised of the main loan at the volume of $3mln to credit small and medium enterprise, and trade guarantees at the sum of $2mln to facilitate export-import operations.
In March, it was announced that “Cascade Bank” would receive a loan at the sum of $5mln from the EBRD to fund small and medium enterprises.
In November-December, EBRD allocated $10mln for “Converse Bank”, $7mln – for “ProCredit Bank” and $10mln - for “VTB Bank (Armenia)”. In all three cases, the means were provided to credit micro, small and medium enterprises.
In May, 2008, VTB Bank and “Teghut” CJSC signed a loan agreement at the volume of $249.5mln, aiming at developing Teghut deposit. VTB representatives state that, despite the crisis, the signed agreement remains in effect.
In July, Swiss Atlantik Forfaiterungs AG Company increased up to $2.5mln the volume of the loan line, provided to “Ardshininvestbank” for external trade financing.
In October, “ACBA-CREDIT AGRICOLE BANK” received a loan from Credit Agricole at the volume of $42mln to increase volumes of crediting for the real sector of Armenian economy and financing of medium enterprise. It was announced in November that EBRD would provide “ACBA-CREDIT AGRICOLE BANK” a syndicated loan at the sum of $50mln for small and medium enterprise crediting. In early December, “ACBA Leasing” received $8mln from EBRD.
In November, General Director of “HSBC Bank Armenia” Tim Slater stated in an interview to Mediamax that “we have $100mln of reserve means in the form of credit lines from our head office: we don’t use those means very often, however we know that in case of necessity we may count on them”.
New players, mergers and acquisitions
On February 5, official opening of “ProCredit Bank” took place in Yerevan. The bank became the 22nd commercial bank in Armenia and the 22nd bank, entering “ProCredit” group.
In June, “Armimpexbank” officially announced the conclusion of its rebranding and the new name of the bank – “Ameriabank”. Let us remind that in August, 2007, the shares of “Armimpexbank” were acquired by “TDA Holdings Limited” Company, affiliated with the largest Russian “Troika Dialogue” Investment Company. In October, “Ameriabank” announced that it was planning to purchase one of Armenian banks.
In September, “Gazprombank” concluded the deal on purchasing 5.85% of the authorized capital stock of “Areximbank” CJSC from “Raiffeisenbank” and made its share in the authorized capital stock 100%. It is expected that in 2009 the bank will be renamed into “Gazprombank-Armenia”.
In the second half of the year, information appeared in the media, according to which “Armenian PostBank”, which had received the preliminary license of the CB, might realize merger with “Converse Bank”.
Entry to capital market
In 2008, a few Armenian banks at once entered the capital market, having issued corporate bonds.
In June, “ARARATBANK” placed its corporate coupon bonds at the sum of 400mln AMD (annual yield – 9%).
In November, “Ardshininvestbank” announced the first issue of its nominal coupon bonds at the volume of 1.5bln AMD (annual yield – 10%). In November, “Converse Bank” announced the issue of medium-term coupon bonds at the volume of 1bln 500mln AMD (annual yield – 10.64%) and placement of the first tranche at the volume of 300mln AMD.
In December, “HSBC Bank Armenia” announced open subscription for nominal coupon non-convertible non-documentary bonds through public offering (total volume – 1bln AMD, annual coupon yield – 9%).
In July, Moody’s Rating Agency assigned “Ardshininvestbank” Ba1/Ba3/NP/D ratings.
In August, Moody’s raised the rating for “ACBA-CREDIT AGRICOLE BANK” from Ba2 to Ba1 on long-term deposits in local and foreign currency (GLC).
In October, AmRating/GlobalRating Rating Agency assigned “Armeconombank” credit rating “BB+” with “possible rise” outlook.
In February, “Unibank” informed on conclusion of the process on implementing the program of ABN AMRO Bank “Improvement of Banking Risks Management Processes”, which composed of 9 modules and was targeted mainly to the retail sphere.
In September, operational center of “HSBC Bank Armenia” opened in Yerevan, where developers of single software support for HSBC business-units in Armenia, Georgia, Ukraine, Russia and Kazakhstan work.
In October and November, “Armeconombank” and “VTB Bank (Armenia)” announced the opening of corporate call-centers with the use of resources of “ArmenTel” Company.
In December, “Ameriabank” announced that all deposits of individuals, exceeding 2mln AMD, would be insured by “Rosgosstrakh-Armenia” Company.