HERE AND BEYOND
Ameriabank breaks stereotypes in pursuit of the Dream
Media Room
2009 was a hard trial for Armenia’s economy, including banks, in terms of crisis. Of the difficulties they had to overcome and ends they accomplished in 2009 tells Ameriabank Development Director Tigran Jrbashyan in his interview to the PanARMENIAN.Net correspondent. He also shares with us the bank’s plans for the future.
 
 
- 2009 was a hard trial for Armenia’s economy. Neither did the crisis spare the banking industry. How did Ameriabank handle the challenges?
 
- During our strategic session back in September 2008 (usually we hold two sessions a year in April and September) we developed possible options. Even then we predicted that 2009 would be very tough. This theory was supported by analytical materials provided by our strategic partner Troika Dialog. Based on this research, we were able to brace up for forthcoming difficulties, for we had in place the underlying strategy while tactics are developed and applied on more concrete day-to-day basis. We took appropriate measures with regard to our market positions, financial indicators management, risk management, development of appropriate procedures, HR management, setup of structural subdivisions. We stepped into 2009 with the following motto: “Crisis is a time of opportunities, and we have to make the most of it.”
 
In fact not only did we ensure all planned indicators although the situation crashed down close to the most pessimistic scenario, but we outperformed some of the indicators on annual basis. From this viewpoint we were able to draw maximum benefit from the opportunities that the crisis created and use them to strengthen our market positions.
If we divide the year in two and set definite goals for each part, we may say that in the first half-year all banks were nonplused by the liquidity crunch while Ameriabank was able to overcome it smoothly and even boost its positions thanks to sufficient resource base laid out back in September 2008. In the second half of 2009 another crucial problem emerged that was materialized in impairment of performance indicators due to growth of non-performing loans. Ameriabank had no difficulties in overcoming this problem either. We not only sustained the volumes of lending even in light of liquidity crunch and increasingly high level of NPL, but ensured portfolio growth. Let’s consider the indicators: in the 1st quarter our key objective was fundraising, for which we took appropriate actions. We pioneered with a 100% deposit insurance coverage program resulting in sharp increase in the volumes of retail and corporate deposits. This helped us resolve the liquidity issue. In the second half-year we homed in on loan portfolio growth. Note that the weight of NPL is among the lowest in Armenia’s banking industry while by loan portfolio volume Ameriabank is one of the leaders.
 
I believe it’s crucial that Ameriabank not only continued to invest for long-term ends, but paid special attention to upgrading its technologies, renovation of new premises and branch areas, expansion of ATMs network. While most banks cut their investments, we decided (and this decision was well justified) that 2009 should be a year of investments, creating sound preconditions for post-crisis rise.
 
The bank’s assets having experienced a double growth over this period, we anticipate over AMD100 billion by yearend. We also expect tangible increase in loan portfolio to over AMD50 billion by yearend. Estimated profit by yearend will be more than AMD1.5 billion, while retail and corporate deposits have experienced manifold growth. We signed several crucial agreements with IFIs. Among these are the agreement with IFC on USD5 million trade finance guarantee, and the USD15 million renewable energy finance agreement. Negotiations on two more projects are complete, relevant agreements will be officially signed in January 2010. All this lays sound grounds for surpassing growth, thanks to which currently we are one of the most fast-growing banks on regional level. In the first half-year 2009 the bank’s key issue was deposit insurance under the conditions of a kind of crisis of confidence to the banking industry and economy in general. We were able to cope with this challenge, which I believe is very important both for Ameriabank and the whole banking industry. This showed that Ameriabank enjoys the trust of international insurance companies. This was one of the best projects enabling us to attain such rates of growth over a short period that no other Armenian bank boasted even in better times.
 
- In 2009 Ameriabank launched a set of new products. Can you assess that these campaigns turned out successful?
 
- Among the products that were important internet-banking should be highlighted in the first place. It is not a technological innovation but a necessity, if you want to be competitive and up to date. It’s just like having a network of ATMs. It’s quite natural.
 
Further, we launched an unparalleled renewable energy finance project. Having started at the end of 2009, this project is scheduled to span several years.
And finally, there is a project targeted at such clients as, in our opinion, have so far been overlooked by banks – those are medium enterprises. We have to deal with two key problems: attractive for banks as they were, large businesses enjoyed advantageous terms and the interest of banks, while small businesses could avail themselves of benefits offered by donors. Between these two there is a niche for which banks had nothing to offer save standard products. Client-oriented bank as we are, our policy suggests that this is the very group of clients that our banks fail to attend. We decided to focus on this group, leveraging our competitive strengths and the opportunities opening for us in international market. We offer to them an unparalleled product in terms of maturity and reducible interest rates, etc. I believe this product will fill in its proper niche, making clients feel they are both called-for and important for the bank.

This is the core of the new products developed by Ameriabank. In addition, we have developed several products that have not yet been launched due to transition character of our banking industry, and in-house problems, to resolve which we negotiate with the regulator – the Central Bank and the National Assembly – to create adequate legal framework for circulation of new products. The year 2009 was quite interesting in terms of innovation on Ameriabank’s level. Due to these innovations we were able to sustain our positions.
 
- Please give a glimpse of your branch policy.
 
- Corporate bank as it is, Ameriabank is specific in terms of branch policy. Our platforms are based not on target groups of retail consumers for us to be represented in this or that location, but on corporate clients.
 
So it’s not to be wondered at that our first branch within the Republic of Armenia was opened
Updated 26.01.2010, 20:48
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