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IN THE COURSE OF THE NEAREST 3 YEARS ARMENIAN BANKING SECTOR WILL LIVE THROUGH A BOOM OF MERGERS AND SALES
Mediamax, Armenia
Sept 27 2007
Interview of the General Director of "Converse Bank" Artak Anesian
to Mediamax News Agency and Banks.am web-portal
- With the arrival of a new owner in the person of Eduardo Ernekian,
"Converse Bank" started carrying out an active policy of selection
of new staff. Does this mean that the personnel changes in the bank
evidence large-scale changes, planned by the new owner?
- The personnel changes in the bank are not directly connected with
the new strategy, which is planned by Mr. Ernekian. "Converse Bank"
has been constantly working and continues working to attract new staff,
to increase the level of professional preparedness. Our plans for
the nearest future include the extension of the team of the bank,
which is first of all connected with the extension of the branch
network. By the end of the year, we plan to open 8 new branches,
and in the course of the year of 2008 - 24 more branches. The branch
network of "Converse Bank" should cover the whole territory of Armenia.
For the course of the nearest one year the bank has an aim set to
occupy at least the second place in the banking system of the country
as to such indices as the volume of assets and the capital, the range
and the variety of the offered services, the number of customers,
the market of plastic cards, the branch network, etc. There is a
corresponding program elaborated, which has gained the approval of
the Board of the bank.
Mr. Ernekian is considering the prospect of increasing the capital
of the bank, and it is expected that the corresponding decision will
be made by the end of the year.
In early October, there will be a new program of agro-crediting
implemented in the bank, which provides for providing credits on
auspicious conditions to farmers and processing companies. The credit
will be provided at the term of 3-5 years, with a preliminary interest
rate of 12-14% per year.
We have also reconsidered the conditions of mortgage crediting;
in particular, we have increased the terms of credit provision and
decreased the interest rates.
By the end of October, we plan to start providing leasing services;
we also consider the prospect of implementing factoring.
- The representatives of commercial banks welcome the arrival of new
banks in the Armenian market in their public statements. How honest
are those statements?
- Already today becomes quite apparent the tendency of arrival of
a number of large financial organizations in the Armenian banking
market. Moreover, those organizations possess serious resources and
technologies. The point is both the purchase of the existing banks
and the establishment of new ones.
One of these days a statement was made on the purchase of
"Armimpexbank" by a Russian investment company "Troika Dialogue", the
deal on the sale of "ITB International Trade Bank" to the Lebanese
"Byblos Bank" is close to its conclusion, the Russian "Gazprombank"
is in the process of negotiations on the purchase of "Areximbank", in
the nearest future the new "Procreditbank" will be established, which
will be specializing in crediting of small and medium enterprises.
It is natural that the inflow of non-expensive resources will lead to
the intensification of competition, and the Armenian banks should think
about the diversification of their resource basis. Besides, the arrival
of new banks will stimulate the implementation of new technologies
and products, which will lead to the reconsideration of the existing
products - both on their quality and the price parameters. As to many
forecasts, this will take place earlier than mid-2008.
Today the credit investments of the banks make only the 10% of the
GDP, which is the lowest index in the region. This evidences that the
banking system of Armenia has sufficient potential for growth in the
spheres of crediting and attraction of deposits.
In conditions of growing competition, it will be especially difficult
for the small banks, which will have to think about a merger or a
sale. I believe that in the course of the nearest 3 years the Armenian
banking sector will live through a boom of mergers and sales. To
my mind, the presence of 5 large and 2-3 specialized banks will be
enough for maintaining the banking system of the country.
- In the condition of a growing competition, the banks of Armenia
started attaching great importance to the implementation of new
technologies. Aren't those innovations untimely from the point of
view that the population of the country does not have sufficient
skills for their practical implementation?
- The answer is definite - no, since the implementation of
new technologies in the banking market of Armenia takes places
simultaneously with the world trends. It is another issue how to make
the presentation of the new products to the population more accessible.
Nevertheless, there are certain improvements already. If 2 years
ago the 95% of the users of the "Bank-Customer" system made the
non-resident organizations, already today there are many resident users
- organizations and individuals. Besides, the tendency of growth of
plastic cards users is noticeable.
- Does "Converse Bank" plan to turn to international agencies for
gaining a rating?
- Gaining a rating is not an aim in itself for us. The main aim of
be given a rating is the establishment of conditions for attracting
resources from the external markets, which is secures by issues of
bonds. This year we do not plan to issue bonds and we have made a
decision to apply for gaining a rating in 2008. This is conditioned
by our striving to enter the securities market, as well as the
international markets, aiming at attracting syndicated credits.
In any case, the partner-banks know us well - we have in fact become
the first Armenian bank, which, lacking a rating, received from a
correspondent-bank a non-secured credit resource (letters of credit)
for realization of trade operations.
- What results did "Converse Bank" reach this year?
- Due to understandable reasons, we started this year with quite low
indices - in the course of 5-6 months the bank was in the process
of sale and did not carry out active policy in the market. Starting
from February of 2007, with the arrival of the new owner, we started
an active activity, due to which the volume of our assets, the credit
investments and the profitability of the bank increased.
I can say for sure that the plans for this year will be fulfilled and
we will even be ahead of the schedule. In the course of 9 months of
2007, we fulfilled the yearly plan as to the volume of assets. The
credit investments of the bank increased for 80%, and it is expected
that by the end of the year the given index will increase at least for
120-130%. Starting from June, the bank has been ahead of the schedule
as to the profitability part, and I am sure that the given tendency
will continue until the end of the year.
P.S. Starting next week, Artak Anesian will occupy the position of
the Executive Director of "Armimpexbank", purchased by the Russian
"Troika Dialogue" Company. Banks.am wishes Mr. Anesian good luck in
this walk of life.
From: Emil Lazarian | Ararat NewsPress
Mediamax, Armenia
Sept 27 2007
Interview of the General Director of "Converse Bank" Artak Anesian
to Mediamax News Agency and Banks.am web-portal
- With the arrival of a new owner in the person of Eduardo Ernekian,
"Converse Bank" started carrying out an active policy of selection
of new staff. Does this mean that the personnel changes in the bank
evidence large-scale changes, planned by the new owner?
- The personnel changes in the bank are not directly connected with
the new strategy, which is planned by Mr. Ernekian. "Converse Bank"
has been constantly working and continues working to attract new staff,
to increase the level of professional preparedness. Our plans for
the nearest future include the extension of the team of the bank,
which is first of all connected with the extension of the branch
network. By the end of the year, we plan to open 8 new branches,
and in the course of the year of 2008 - 24 more branches. The branch
network of "Converse Bank" should cover the whole territory of Armenia.
For the course of the nearest one year the bank has an aim set to
occupy at least the second place in the banking system of the country
as to such indices as the volume of assets and the capital, the range
and the variety of the offered services, the number of customers,
the market of plastic cards, the branch network, etc. There is a
corresponding program elaborated, which has gained the approval of
the Board of the bank.
Mr. Ernekian is considering the prospect of increasing the capital
of the bank, and it is expected that the corresponding decision will
be made by the end of the year.
In early October, there will be a new program of agro-crediting
implemented in the bank, which provides for providing credits on
auspicious conditions to farmers and processing companies. The credit
will be provided at the term of 3-5 years, with a preliminary interest
rate of 12-14% per year.
We have also reconsidered the conditions of mortgage crediting;
in particular, we have increased the terms of credit provision and
decreased the interest rates.
By the end of October, we plan to start providing leasing services;
we also consider the prospect of implementing factoring.
- The representatives of commercial banks welcome the arrival of new
banks in the Armenian market in their public statements. How honest
are those statements?
- Already today becomes quite apparent the tendency of arrival of
a number of large financial organizations in the Armenian banking
market. Moreover, those organizations possess serious resources and
technologies. The point is both the purchase of the existing banks
and the establishment of new ones.
One of these days a statement was made on the purchase of
"Armimpexbank" by a Russian investment company "Troika Dialogue", the
deal on the sale of "ITB International Trade Bank" to the Lebanese
"Byblos Bank" is close to its conclusion, the Russian "Gazprombank"
is in the process of negotiations on the purchase of "Areximbank", in
the nearest future the new "Procreditbank" will be established, which
will be specializing in crediting of small and medium enterprises.
It is natural that the inflow of non-expensive resources will lead to
the intensification of competition, and the Armenian banks should think
about the diversification of their resource basis. Besides, the arrival
of new banks will stimulate the implementation of new technologies
and products, which will lead to the reconsideration of the existing
products - both on their quality and the price parameters. As to many
forecasts, this will take place earlier than mid-2008.
Today the credit investments of the banks make only the 10% of the
GDP, which is the lowest index in the region. This evidences that the
banking system of Armenia has sufficient potential for growth in the
spheres of crediting and attraction of deposits.
In conditions of growing competition, it will be especially difficult
for the small banks, which will have to think about a merger or a
sale. I believe that in the course of the nearest 3 years the Armenian
banking sector will live through a boom of mergers and sales. To
my mind, the presence of 5 large and 2-3 specialized banks will be
enough for maintaining the banking system of the country.
- In the condition of a growing competition, the banks of Armenia
started attaching great importance to the implementation of new
technologies. Aren't those innovations untimely from the point of
view that the population of the country does not have sufficient
skills for their practical implementation?
- The answer is definite - no, since the implementation of
new technologies in the banking market of Armenia takes places
simultaneously with the world trends. It is another issue how to make
the presentation of the new products to the population more accessible.
Nevertheless, there are certain improvements already. If 2 years
ago the 95% of the users of the "Bank-Customer" system made the
non-resident organizations, already today there are many resident users
- organizations and individuals. Besides, the tendency of growth of
plastic cards users is noticeable.
- Does "Converse Bank" plan to turn to international agencies for
gaining a rating?
- Gaining a rating is not an aim in itself for us. The main aim of
be given a rating is the establishment of conditions for attracting
resources from the external markets, which is secures by issues of
bonds. This year we do not plan to issue bonds and we have made a
decision to apply for gaining a rating in 2008. This is conditioned
by our striving to enter the securities market, as well as the
international markets, aiming at attracting syndicated credits.
In any case, the partner-banks know us well - we have in fact become
the first Armenian bank, which, lacking a rating, received from a
correspondent-bank a non-secured credit resource (letters of credit)
for realization of trade operations.
- What results did "Converse Bank" reach this year?
- Due to understandable reasons, we started this year with quite low
indices - in the course of 5-6 months the bank was in the process
of sale and did not carry out active policy in the market. Starting
from February of 2007, with the arrival of the new owner, we started
an active activity, due to which the volume of our assets, the credit
investments and the profitability of the bank increased.
I can say for sure that the plans for this year will be fulfilled and
we will even be ahead of the schedule. In the course of 9 months of
2007, we fulfilled the yearly plan as to the volume of assets. The
credit investments of the bank increased for 80%, and it is expected
that by the end of the year the given index will increase at least for
120-130%. Starting from June, the bank has been ahead of the schedule
as to the profitability part, and I am sure that the given tendency
will continue until the end of the year.
P.S. Starting next week, Artak Anesian will occupy the position of
the Executive Director of "Armimpexbank", purchased by the Russian
"Troika Dialogue" Company. Banks.am wishes Mr. Anesian good luck in
this walk of life.
From: Emil Lazarian | Ararat NewsPress