Artak Hanesyan's interview to Elite Life Magazine

Media Room

Interview of A.Hanesyan to "Elite Life" Magazine

- Ameriabank has a rather rich history, hasn’t it?

- Yes indeed, Ameria is one of the oldest banks in Armenia. It was established in 1910, as a branch of Caucasian Trade Bank, which during the soviet years was transformed to the Armenian branch of the USSR “Vneshtorgbank”. In those years, the Bank was the only one in the Republic, which serviced foreign trade transactions of economic entities. In July 1992, it was renamed into “Armenian Import-Export Bank”, and in August 2007, the “TDA Holdings Limited”, an investment company affiliated with Russian investment group company “Troika Dialogue” obtained the major package of shares of the Bank (96%). Today, by the amount its charter capital, Ameria holds leading position in the Armenian banking system, and as proved by the dynamics of financial indicators, ensures active growth by several indicators.   
- What distinguishes Ameria from other 21 Armenian banks?
- Our Bank mainly has expanded investment activity, due to which it will be providing such services, which so far are not available in Armenia, including asset management, establishment of mutual funds, capital financing, organization of subscription process, consulting on mergers and acquisitions.  In addition, when providing services we focus not on selling of banking products, but on provision of individualized services meeting a client’s wishes, and naturally, the quality of such servicing should be in conformity with international standards. Today, the Bank makes large investments in developing and introducing of Customer Relations Management (CRM) system. This super-advanced technology will permit the Bank to follow constantly the dynamics of clients’ activities with the Bank and identify their needs.
At the same time, having the largest charter capital among the Armenian banks, and enjoying the benefit of the strategic partner “Troika Dialog”, the largest Russian investment company, the Bank has the opportunity to implement big projects, which other banks are not able to implement due to regulatory restrictions of the Central Bank.
- What is your opinion of the evolution of Armenian banking system?
- In my opinion, the banking system is one of the most developed institutional systems in Armenia. Among CIS countries, Armenia’s banking system is the most supervised and regulated. It starts to build relations with international structures only recently. If only some years ago in banks of Kazakhstan and Russia resources attracted from international financial markets constituted 30-60%, Armenia’s same indicator did not exceed 4-5%. On the one hand, it was bad, since banking system did not have the same role in the economy of our country as it had in Russia or Kazakhstan. Yet, on the other hand this low level of integration mitigated the influence of shocks occurring in the international financial systems.
In addition, we should not forget that Armenia’s banking system has passed difficult stages – 1994, 1998, and 2004, which also served as salvation stages for our financial system. Of course, in that restructuring phase, a number of structures emerged that later were forced out of the market due to competition. Nonetheless, in that period, everyone was learning new conditions of doing business, and the banking system was growing. If not for mini-crisis, we would never become what we are today. And nowadays, growth of competition is observed in the Armenian banking system, which results in bringing interest rates to real market levels, struggle for customers, and continuous development of internal technologies ensuring high-quality servicing and raising of staff qualifications. In general, today’s banking system has high level of capitalization. Nevertheless, the level of financial intermediation is rather low, although some growth is observed in the past years. For example, as of the yearend of 2008, the ratio of loan investments to GDP was 17.5%, and the ratio of deposits to GDP was 12.3%. By these indicators, Armenia is still far behind the developed counties.
- How does the world crisis affect Armenia?
- Contrary to many countries, Armenia faces economic rather than financial crisis. We import crisis and this happens in several directions: in the first place starting with changes in the transfer volumes. The main sources wherefrom we get transfers are Russia and the USA, which nowadays are in deep crisis. Our country is also affected by the fall in prices in the international economic system, since the prices of products that we export fall too. So does the business activity in the investment area.
Generally, the history of the world economy witnesses that a crisis has a healing nature. It helps to “blow up balloons” and builds a foundation for reforms. For example, the USA and Europe always come out of a regular crisis healed and ensure more rapid economic growth.
- Do you think it normal that credit interests have increased to a certain extent? 
- It is hard to imagine that in this condition interest rates and loan terms and conditions would remain unchanged. The system organically echoes to signals, which it receives. Today there is a problem of accurate assessment of risks. Therefore, banks introduce stricter terms and conditions for provision of loans and start to control risks, or reserve from facing such risks at all. Consequently, such assessment of risks results in the increase of interest rates.
- Are there any changes in Ameriabank regarding provision of loans?
- Although our loan portfolio is diversified, we focus on large companies. Our main clients are large companies. Recently, we have reviewed our lending conditions, and such revision concerns mostly requirements to a borrower, rather than interest rates. We have not slowed down provision of loans, on the contrary, we have increased our loan portfolio; simply, we act more carefully in selecting clients and provide loans to such clients only, whom we know and who are accountholders of the Bank, so their financial flows are apparent. By the way, in Q4 2008, the increase of loan portfolio of the Bank made 31.2%.   
- Is there any area, which obviously benefits from this crisis?
- In any situation, there are winners. There is a famous analysis stating that the sales of cosmetics increases during crises, since females, trying to save, prefer to spend money not on expensive clothing, but on cosmetics. In the USA and England there is a model called “lipstick index”, which indicates the depth and the duration of a crisis. In general, businesspersons and companies, who under new economic conditions succeed in ensuring price-quality comparability or act with new technologies will benefit from crisis. Many corporations with international repute, such as General Motors, Nestle and others emerged just due to the crisis.
- When will this situation in the world calm down?
- I think that we will receive signals of markets recovery and systems salvation by the end of the third quarter of this year. Of course, after the crisis we will face quite a different world: financial and economic systems will be transformed completely. Today, changes occurring in financial system institutions, banks, exchanges, information and other industries are already revolutionary. Under normal development conditions, it is hard to imaging such a thing. These changes must serve as sound basis for further economic growth and financial development. It is necessary to take into consideration that the end of the crisis will be conditioned by improvement of the situation in the USA, since the influence of this country on the world economy is big.
- Do you like your job?
- This is the only area of activity I have ever been engaged in. After graduating from the University, I worked in the Supervision Department of the CBA, and then joined a commercial bank where I held different positions; in October 2007, I was appointed as the General Director of Ameriabank. I like my job very much and cannot imagine myself involved in any activity other than this. A banker’s job is very interesting, yet at the same time, very difficult and responsible, since he deals with people’s trust: they trust their money to bankers, who must be able to maintain them properly, as well as ensure additional income thereon. I constantly follow all innovations occurring in the international practice and try, jointly with my team members, to introduce the best practices in the banking business.
Usually, I dedicate 10-12 hours (and sometimes longer) of a day to the job I love, often, I have business meetings. Sunday is the only rest-day, which I dedicate to my family.
Updated 25.07.2009, 11:22
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