HERE AND BEYOND
Ameriabank: we care for business growth of our clients
Media Room
Interview with Grigori Sargisyan, Ameriabank’s “Shengavit” Branch Manager.

The current year has been economically challenging for a variety of reasons. Many banks run short of high-quality borrowers, especially in small and medium-sized businesses. In your opinion, which were the fundamental changes faced by the market for lending to small and medium-sized businesses?

Certain slowdown in economic growth rates has been observed this year mainly due to external factors, notably Western sanctions against Russia affecting the economy of Armenia through its close ties with economy of Russia. For instance, there has been a certain decline in the rates of private transfers resulting accordingly in reduction of people’s purchasing power as opposed to the previous year, which has surely affected the profitability of Armenian business.
All the while it should be noted that there is no such tendency of decline in SME lending volumes or clients’ applications in our bank. Ameriabank’s SME lending growth goes on from year to year. More precisely, we report growth by all indicators including SME. In Q3 this year SME loan portfolio growth was 35.5%.

What products has Ameriabank got to offer to SMEs? What makes them different from other products available on the market?

Comprehensive solution of client’s needs is our key advantage, while collateral-free lending is the distinctive feature of our product line. We provide secured loans for business development, working capital financing, and fixed asset acquisition. All these credit products are very similar to those offered on the market. Herewith, clients with over three-month account history with Ameriabank can benefit from collateral-free loans. Our product line includes purchase order finance for goods and services supply. This product provides the enterpreuner with funding without any waste of time or material costs related to paperwork. The credit line comprises 50% of turnover on the client’s account with Ameriabank. Credit line on Customs card is yet another interesting product ideal for importers. Moreover, this credit line comes with a grace period, which means that if the client repays the debt within the specified period no interest will be charged, since our initial goal is to facilitate the client’s operations and save his time.
This year we have launched “Boomerang” special campaign for SME crediting. The point is that if for whatever reason an enterpreuner no longer wishes to use services of his bank but is bound by the existing loan and reluctance to incur new costs related to lending procedures in the new bank, we are ready to cover all the expenditures related to property evaluation, pledge and agreement notarization given that the client transfers his loan to Ameriabank. The enterpreuner will receive a bonus of 1% of his loan to be managed at his own discretion.
However, as I have already noted, the key element of our activity is comprehensive solution of the client’s problems.
The fact that we have transformed from a corporate bank into a universal one does not mean we perceive client service as “mass-line production”. We are still a client-oriented bank. No matter if the sole purpose of the client’s visit is to get a loan, we still analyze the objectives he intends to fulfill by means of the given loan and offer him a better and more thorough solution. In other words, service package may include various products applied at different stages of problem solution – depending on the stage it can be a loan or a letter of credit, etc. However, just giving a loan does not end in itself, since we build long-term partnership relations with our clients. As a bank we are all for growth and expansion of our clients’ business.

How do you assess the rate of SME non-performing loans? What risks should be addressed here?

Generally, an indicator of 2-5% is regarded as normal. We have proven not to exceed this acceptable level thanks to our consistent customer service and portfolio quality control. When it comes to risks, lots of banks have currently adopted a quite aggressive credit policy, e.g. they grant tenfold salary credit lines or loans based on collateral sufficiency only. Such policy results in unhealthy competition and high market risks, which in some cases may harm both the bank and the client. We are of the opinion that prior to applying for a loan the client should decide whether he/she will be able to repay it and be very attentive when concluding a contract, paying special attention not only to loan interest rate but also to possible extra payments increasing the total cost of the loan. In the meantime, the bank should warn the clients that a new loan can make matters even worse. That is how we work, protecting the clients against risks and keeping our credit portfolio safe and sound.
Today we are open for SMEs with full package of bank services envisaged by universal banking. Fundraising from international financial organizations including USD 20mn convertible subordinated debt facility agreement signed with FMO last month enable us to provide our clients with financing at competitive interest rates. Our comprehensive financial solutions, as well as individual approach attract our clients.

Anahit Julhakyan 
Updated 07.11.2014, 9:31
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