HERE AND BEYOND
Ameriabank: Our clients are those who seek stability
Media Room

Currently the competition for depositors among Armenian banks is one of the toughest ones in that market. Banks behave differently in that ‘game’ depending on their positioning and confidence. In this regard Ameriabank is a ‘heavyweight’ that does not respond to abrupt ups and downs of interest rates of some competitors. In her interview with the Delovoy Express Helen Danielyan, Head of Individual and Premium Client Managers’ Service, Ameriabank, talks about the situation in the deposit market and Ameriabank philosophy in this banking sector.

Competition among the Armenian banks for attracting individuals is getting tougher. How do you estimate the current situation and which are the main tendencies in this regard?
The competition is tough indeed though the deposit interest rates recently have falling tendency or remain stable, at least during the last two quarters. Even for the whole year the trend is the same, while in the international market the deposit rates tend to rise. Of course, that rise started from a rate essentially different from that in Armenia. If we get influenced by these movements, it may considerably impede the economy of the country since the deposit interest rates are directly linked to the loan interest rates. Since the time lag of international tendencies affecting our economy is considerable, let’s hope that we will manage to skip them and retain the current level at least.

On the other hand we have rather interesting trends in the Armenian banking system.
There are several banks that change the deposit interest rates very abruptly. Whenever they need to replenish their funds, they boost up the rates to attract deposits. Once the funds are raised, they decrease the rates. This happens periodically.

Does it mean your Bank is against such policy?
Definitely. We will never compete with such banks. The factors that influence the interest rate formation are deeper and require systemic approach. At the beginning of the year we always perform interest rate analysis and forecast its level. The interest rate is a significant component of the annual business plan.

So how does Ameriabank act in this situation? How do you manage to attract new depositors and retain the old ones? Are the interest rates decisive in this regard?
Ameriabank has never treated a price competition as priority. This may be illustrated by the fact that our rates have been slowly going down during the year. Despite this, we did not suffer clients’ and funds outflow, just the contrary, we attracted more clients and funds. As per the results of the 9 months of the year, retail deposits increased by AMD 7 billion.
Ameriabank always performs market analysis, including the competitors and the depositors. Based on the results of analysis we create a base interest rate for this or that product. Thus any bank product initiated by us is based on client segmentation, i.e. we determine its potential users first.

Does this mean Ameriabank has a variety of deposits to offer?
Sure. Our deposit package is quite developed and includes a great number of deposit options. For instance, we offer ‘Standard’ deposit option with the highest interest rate. Yet, for this type of deposit the deposit amount can be neither increased nor decreased throughout the whole term. We have also another option, called ‘Savings Account’ which is a variable deposit. This means that you can freely add and withdraw funds during the term. The annual interest rate for such deposits varies from 3 to 6 %, depending on the currency. The depositor can use this type of deposit as current bank account and receive pretty good interest. This is a classic option where the deposit is a saving instrument and not an investment one. This type of deposit is widely practiced in the international market and it influences the banking interest rate.

Could you estimate the efficiency of various promo-actions arranged by Ameriabank? What is expected in the nearest future?
Our last promo-action was in December 2010. The action was called ‘Know true cost of money’ and proved to be an efficient one. That time we attracted AMD 3,5 billion in 2 months. Currently we have a client loyalty program under which those clients who wish to prolong their initial deposits under the ‘Know true cost of money’ campaign are offered more beneficial terms as compared with new clients. Client’s loyalty is above all for us. I am glad to say that practically all our clients stay with us despite the fact that our base interest rate did not increase and even decreased a bit.

Currently we are conducting the ‘Your deposit’ campaign where the depositor may use the deposit amount on 5 holidays without losing the interest. These are New Year, March 8, September 1 (Knowledge day), Independence day of Armenia and own birthday. Moreover, if the client refunds the utilized amounts within one month, interests shall accrue even for the period when the amount was not actually on the account.
The campaign will last until March 31, 2012. Everyone is eligible to participate.

Could you outline the Ameriabank client image bearing in mind that Ameriabank is a universal bank?
Of course. First of all it is a client who seeks stability and appreciates quality in everything.
The client does not need to know much about the banking sphere, he can simply apply to the bank and we will find the best option for him in the given situation. To me, choosing a bank is a fundamental issue since a long-lasting cooperation is to be established. We find it important for the client to understand and appreciate this.

Why high deposit interest rates offered by Armenian banks do not attract non-residents in Armenia?
You are quite right. High rates do not attract. It is the normal rates that attract. I can state with pleasure that Ameriabank has a great number of non-resident clients. These are the clients who appreciate stability and dynamic development above all. They need to be sure in the bank’s tomorrow. Often non-resident clients are not in Armenia and thus cannot quickly react to the situation in Armenia and in the bank. This is why they choose their bank based on the guarantees it provides and not on the interest rate. In this regard Ameriabank is like a guarantor bank for them.
 

Updated 21.02.2012, 11:10
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