Ardshininvestbank (ASHIB) is ranked number one in Armenia’s banking sector and is the 16th largest enterprisein the country. Nerses Karamanukyan, who is the newchairman of the ASHIB management board, explains, “We are the most professional bank in Armenia in providing loans and support for large industrial enterprises.”ASHIB provides a wide range of services to Armenianmining, energy, engineering, machine-building, construction sectors, as well as to the country’s other fast growing clusters of economy. It is also the bank of choice for the country’s main universities and utilities companies, such as gas, electricity, water suppliers and telecom providers. Having the largest branch network throughout the country, the bank serves retail customers, too. ASHIB has issued the largest number of VISA cards among the Armenian banks and is one of the major operators of private money transfers market. “These services, as well as others, targeted on individuals, will be further enhanced by the newly-created retail arm in the bank,” Nerses Karamanukyan says.
Partnering with customers
An emphasis on personalised service is one secret of ASHIB’s success. As Nerses Karamanukyan points out, “Our clients are our partners, not only when they are flourishing but also when they are experiencing difficulties. We are here for them. Our motto is ‘we are strong together’.” ASHIB grew out of two large banking enterprises, one providing services to the industrial sector and the other serving the agriculture sector. This has given ASHIB its expertise in serving large enterprises, but ASHIB is also committed to being a bank for the people of Armenia. “If you go to some small towns in the regions, our brand is recognized simply as ‘the bank’ as we have been there for over 80 years,” Nerses Karamanukyan explains.
Through its loans, ASHIB is providing essential support for Armenia’s economic growth. “We provide loans from USD500 dollars (€335) for small farmers up to millions of dollars for our big industrial companies. We are a universal bank with all kinds of customers,” Nerses Karamanukyan explains.
The bank has received strong support from the IFC and is recognised as having one of the strongest corporate governance structures of any bank in the country. ASHIB is very positive about the future of Armenia. Nerses Karamanukyan cites the country’s potential to serve as a regional transport hub when the border with Turkey is opened and he sees strong prospects in financial services and exports, for example of cement to Georgia and Russia, as well as to other neighbouring countries. To potential investors, he says, “Armenians are well-educated, target-oriented and results-oriented people, and by investing in this country you can be sure that if you set clear distinct goals, you will achieve them.”

European Times Armenia

Ardshininvestbank has emerged as one of the largest players in Armenia's small, but highly competitive, banking market. To keep up the momentum, the bank is exploring many options to raise funds on international and domestic markets.
When I caught up with deputy chairman Evgeny Spravtsev at the BTA Interbanking conference in Almaty at the end of September, he explained that the bank had passed two highly significant milestones in the last year. First, in December 2007, the International Financial Corporation (IFC) took a 10% stake in the bank, also providing a $15m credit line for small business and mortgage funding. In July, Moody's Investors Service assigned its first credit rating to Ardshininvest. At 'Ba3/Ba1/NP/D-', Ardshininvest has the highest rating it could hope to gain given Armenia's country ceiling.
These developments, Spravtsev says, are the bricks on which the bank's future will be built. "With the IFC's investment and our Moody's rating, we can go to international financial markets to borrow money. They make us more understandable for our peers, and show that we're as transparent as any CIS bank could be."
The bank is preparing for an AMD1.5bln (around $5m) domestic bond issue at the end of November. "This is our debut issue. It's a small amount by international standards, but for Armenia it's quite big – almost four times largest than the latest issue. Our main objective is to establish a credit history so we can borrow more in future," says Spratsev. It also has two deals in the pipeline with international investors, to be closed by the end of this year.

Hard job

The lobby of the Intercontinental Hotel in Almaty seems an appropriate place to mull over the pros and cons of raising money on international capital markets, given Kazakhstan's recent financial history. Comparing Armenia to Kazakhstan, Spravtsev explains that, "The Armenian financial sector is less involved with international financial markets. This was a disadvantage, but at this stage it's to our advantage because we are not so harassed by the financial crisis." However, the gloom that international capital markets have been plunged into means that despite eight years of double-digit GDP growth in their country, for Ardshininvestbank and other Armenian banks, it's "not as easy to raise capital as we thought."
A large part of Spravtsev's role involves raising money and arranging trade finance. He was invited to join Ardshininvestbank in order to bring his experience of the Russian market – working at Home Credit and Finance Bank – to Armenia. The bank's owners had already spotted that Armenia's banking sector was progressing in a similar way to Russia's, but was several years behind in terms of development.
He is particularly proud of the IFC deal – "the largest deal with an institutional investor in recent Armenian history," he points out. As well as working on the bond issue and raising finance from international investors, he is also working on partnerships with international institutions and arranging trade finance, opening as many lines for the bank as possible. Most recently, the bank announced a trade finance deal with ?SOB (Ceskoslovenská Obchodná Banka) – the very first trade finance deal between Czech/Slovak and Armenian banks.
Given the highly competitive landscape of the Armenian banking sector, investment is necessary to maintain Ardshininvestbank's position as one of the country's top three banks. "There are 22 banks in Armenia – that's not many for some countries, but for Armenia it's too many. We expect to see a process of consolidation, and more new entrants to the market," Spravtsev says.
Around 50% of Armenia's banking sector is already in foreign hands, and this figure is likely to increase. The Armenian banking sector is extremely well regulated, according to a report released earlier this year by ratings agency RusRating, which has further increased its attractiveness to potential investors.
Ardshininvestbank's majority owner, with 86.8% of the stock, is Region-IFC – a diversified holding company owned by businessman Karen Safaryan. It was formed in 2003 and later in that year acquired a significant part of the assets and liabilities of two Armenian banks - Ardshinbank and Armagrobank.
It is active across both corporate and private banking, with more than 12,000 business clients and 52,000 private clients. "We think of ourselves as a universal bank. There is no one sector that we would like to develop more than others," Spravtsev says.
Today, the bank is Armenia's largest in terms of authorized capital, loans, net profit and term deposits. It is also a big player in the international transfer market, which is highly important to the Armenian economy – remittances from Russia amounted to $554m in the first quarter of 2008 alone. "There is a huge cash flow into the country from Armenians working abroad," explains Spravtsev. "For many families this is their only source of income. We work with all the major providers – both international firms like MoneyGram, and CIS-based firms such as Unistream and FastPost."
Much of the Armenian economy is still cash-based, meaning that Ardshininvestbank and its peers have an uphill struggle persuading their clients to adopt new banking products.. "What I say to everyone here is 'be patient, you can't do it all in a day'," Spravtsev says. "Good communication is very important."

Highlighting its arrival as one of Armenia's largest banks, Ardshinivestbank moved to new headquarters in central Yerevan in April this year. After three years of renovation work, the opening of the new offices, designed by prominent Armenian architect Sargis Gyurzadyan, was celebrated with a lavish housewarming attended by the then president, Robert Kocharyan, and the president-elect, Serge Sargsyan. It was the chairman of Ardshininvestbank's management board who summed up the significance of the occasion, describing his ambition "to bring to life an idea of a pan-Armenian, big and powerful bank".

Business New Europe, Clare Nuttall in Almaty
November 3, 2008

At the inauguration of Ardshininvestbank's head office the chairman of the management board expressed a conviction...
Yesterday the RA State Authorities and business elitе took participation at the inauguration of the head office of Ardshininvestbank-businessmen, ministers, the mayor of Yerevan, high-ranking officials. The president Robert Kocharyan and newly elected and acting Prime Minister Serj Sargsyan also joint the latters. At the ceremony the chairman of management board of the Bank emphasized, that Ardshininvestbank had a high growth rate due to internal political stability, economic development and tight policy implemented by CB. He informed that in the near future the bank is going to become an open stock joint company, the securities of which will be listed in the European bourses. We are eager to create an idea of All-Armenian Bank and to transfer the motto ”We are strong together” into action”- stated the chairman of the management board of the bank.
The president of the CB of the RA mentioned about the significance of the inauguration of Ardshininvestbank’s head office in our banking system. He reminded the guests, that when it was announced an open competition and Karen Safaryan was recognized as a winner five years ago, the bank has been established with assets of 3 billion AMD. Now the assets of the Bank amount to150 billion AMD.
The president of the RA R. Kocharyan assessed the new head office of Ardshininvestbank as excellent, telling there is no other bank having such a superior building of head office like this. It will be a very serious drive for other banks too. The president also brought to mind the contract of acquiring “Ardshinbank” made in 2003. He told that the city, the City Admininstration, the private enterprises, the Bank and the customers have benefited from that.

AZG magazine 05.04.08

After complete renovation the new head office of Ardshininvestbank has been inaugurated …

The new building of Ardshininvestbank has been inaugurated after full renovation in Yerevan.At the inauguration the president of the RA Robert Kocharyan, the prime minister and newly elected president Serj Sargsyan were present. “This is a case, when everyone has benefited from the deal we assented some time ago”. The City Administration having such an impressive and superior building, Yerevan-having 2 beautiful buildings, the private enterprises, the Bank have benefited from this building. And the Bank with AMD 105 billion of assets works with thousands of citizens crediting their businesses, granting consumer loans or enlivening the trade. “This is a deal from which everybody benefited”- said R. Kocharyan in the interview with the journalists after the inauguration. After passing through the six floors the president got great impressions. “No bank has such a powerful Head office. This will be a serious drive for other banks to have this kind of building of head offices and branches. This will be an incentive for the system” - said the President. In the words of the CB president Tigran Sargsyan, that was a prominent day in the banking system, as it became clear that in Armenia such operations can be implemented, that are peculiar to European countries. The actions of authorities should be operative; there should be used tools that will give an opportunity to the customers not to feel complications of financial depression. We implemented such activities five years ago when open competition was announced creating favorable conditions for the customers of Ardshininvestbank”- recollected the president of the CB.

The official gives a high degree of importance to those figures: in 2003 a building having assets of AMD 3 billion was on sale, and now the building has assets of AMD 105 billion.
As he has assessed, “Ardshininvestbank” can be satisfied by of its indicators, as it occupies the first position in terms of assets.
In addition, the building constructed in 1950s, is fixed and has 9 point of seismic stability. Two more floors have been added to the existing building, keeping the front part of architectural style unchanged. Architect Sargis Gurzadyan possessed the architectural solution of the front part. As the deputy chairman of the Bank board Khachatur Zakaryan mentioned, the cost of construction operations lasted about two years is AMD 3 billion, while the cost of the whole program is AMD 5 billion. On the word of him, the Bank is among the three of the leading Armenian banks, and comes first in terms of employees and branches. “Ardshininvestbank” is included in the list of big taxpayers. In 2007 the Bank received a windfall net profit of AMD 4 billion, the total equity of the bank amounted to about AMD 105 billion at the end of the last year, and the liabilities reached to AMD 85 billion.Having more than 1000 employees, the Bank holds 49 branches in the marzes of the RA, 4 branches in NKR and representative office in Paris.
The responsible parties of Ardshininvestbank. Confirmed, that the Bank has intentions to transform into open joint stock company in the near future, opening its doors to our Diaspora and offering to become a stockholder. “The stock quotation will be implemented in the leading European stock exchange markets” - stated the Chairman of the Management board, emphasizing that he wants to bring to life an idea of Pan-Armenian big and powerful Bank”.

Republic of Armenia magazine 05.04.08