Saturday, April 10 2010 16:52
Chairman of Armenian CB: Merger of Ameriabank and Cascade Bank will create new investment opportunities for Armenia's banking system
ArmInfo. The merger of Ameriabank and Cascade Bank will create new investment opportunities and will foster financial intermediation in Armenia's banking sector, Chairman of the Central Bank of Armenia Artur Javadyan said during a press-conference today.
He said that the cost of the deal is a commercial secret. He welcomed the merger and said that this deal will have continuation.
Javadyan said that Ameriabank and Cascade Bank have seriously continuted to the stabilization of Armenia's banking system. Since 2007, when TDA Holdings Limited bought a controlling stake in Ameriabank (former Armimpexbank), the bank has repeatedly replenished its capital by issuing additional shares. As a result, the bank has increased its assets sevenfold and has jumped from 16th to 7th place in this index. As regards Cascade Bank, it has always been known for its high culture and quality.
Javadyan urged the Armenian banks to create conditions for improving corporate ethics: "Such a post-crisis consolidation will foster financial intermediation: investments will become larger, risks - more controllable, and it will be easier to confront challenges."
Chairman of the Board of Directors of Ameriabank, Chairman of the Board of Directors of Troika Dialog Ruben Vardanyan said that Ameriabank is not going to change its strategy as a result of the merger. "We give high priority to consolidation and believe that the bank's organic growth would take a long time while the merger with Cascade Bank will speed up this process especially as Cascade Bank and Ameriabank have similar ideologies. We are happy that Mr. Cafesjian will remain our shareholder and hope that our bank will provide services not only in Armenia but also abroad," Vardanyan said.
Member of the Board of Directors of Ameriabank Andrey Mkrtchyan said that in the next five years the bank will study the capacities of the Georgian, Iranian and Southern Russian markets. "We will continue to be a corporate bank with serious investment banking projects and will go on offering retail products to corporate customers."
Answering ArmInfo's question Vardanyan said that the stakes of the shareholders of the merged bank will be specified and revised depending on the shareholders' structure. This information will be made public only when the deal is finalized in compliance with the CB's requirements on disclosure of information on shareholders. The managers of the bank will be allowed to buy shares. This will be a big stimulus for them as they will feel themselves as owners rather than just executors.
Member of the Board of Cafesjian Family Foundation Steve Scallen said that Gerard Cafesjian has welcomed the merger as it will allow creating a stronger bank and is ready to support the development of the other companies incorporated into Cascade Capital Holdings (Cascade Insurance and Cascade Investments) and to carry out different projects in Armenia.
On April 10, 2010 Ameriabank and Cascade Bank announced that TDA Holdings Limited, the owner of Ameriabank, had bought 100% of Cascade Bank's shares. The agreement between TDA Holdings Limited and Cascade Capital Holdings, the shareholder of Cascade Bank, was signed on March 31. TDA Holding acquired shares in Cascade Bank as the first step in a merger of the two banks. The merger is to be completed by November 2010. The former shareholder of Cascade Bank, Cafesjian Family Foundation, will get a small share in the capital of the bank.
The amount of the deal has not been announced. The merger will create one of the strongest financial institutions in Armenia with consolidated capital of USD 75 million, assets of USD 400 million, liabilities of USD 262 million assuring the bank among top three positions in the domestic market. As of late 2009 total capital of Cascade Bank was $20.1 million (17th position in the banking system) and capital of Ameriabank was $57.5 million (4th position).
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