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Global Financial Crisis Restrains Creation Of All-Armenian Bank

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  • Global Financial Crisis Restrains Creation Of All-Armenian Bank

    GLOBAL FINANCIAL CRISIS RESTRAINS CREATION OF ALL-ARMENIAN BANK

    ArmInfo
    2009-05-27 10:01:00

    The global financial crisis restrains the process of creation of a
    global Armenian retail bank (All-Armenian Bank - editor), Armenia's
    minister of economy, Nerses Yeritsyan, tells bne business issue. The
    government contributed $20m to the capital of the bank, which has
    already been set up, but isn't operational yet. The plan was to raise
    another $80m from Armenians around the world. However, the crisis threw
    a wrench into the plans, as most of the commitments - which came from
    both large Armenian-owned businesses and private individuals - have
    been put on hold after markets crashed around the world at the end of
    last year. "We took the bank on a road show last year and found there
    was a lot of support amongst the diaspora," says Yeritsyan. "However,
    these commitments have been withdrawn for the moment while everyone is
    assessing their position. But we are confident that they will return
    and we can push ahead as planned with the bank", Yeristyan stressed.

    "It is a global retail bank that will target Armenians living
    overseas," he says. "Imagine: if only 1% of all Armenians take a
    credit card from the new bank, then that will generate enough money
    for us to say goodbye to [international financial institution] funding
    forever." Creation of All-Armenian Bank will allow mobilising resources
    and investing into targeted projects back in Armenia. "It is a way
    for our diaspora to take a more active role in the development of
    the country and at the same time earn a good return on that growth,"
    says the minister.

    As the author of the publication says, the inflow of remittances
    is already worth billions of dollars a year, but this is only the
    tip of the asset iceberg and a fraction of the personal wealth of
    successful Armenians who live overseas, most of which is deposited in
    local banks. The author comes to the conclusion that Armenia's best
    export is its people and the government is hoping to tap its wealthy
    diaspora by setting up a global retail bank that can funnel some of
    their money into projects back at home.

    In the meantime, the government has hired head hunters to find a top
    quality international CEO, as the tricky bit of making a global retail
    bank work is that it will have to compete with high street banks in
    the US and UK in terms of the quality of its service.
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