Friday, October 15 2010 17:41
Ameriabank "invents" its own mechanism of hedging market risks
ArmInfo. Ameriabank and International Finance Corporation (IFC) signing an agreement on conclusion of swap deals - trade and financial exchange operations on Friday.
"The tool is currently an innovative product in the Armenian market, meanwhile, it is also quite popular in the international market",- Director of Investment Operations Department of Ameriabank, Andrey Shinkevich, said at today's press conference dedicated to the signing of the agreement.
According to him, the agreement on swap deals will allow Ameriabank to more efficiently manage market risks, hedge its currency and interest risks.
For his part, Development Director of Ameriabank Tigran Jrbashyan said that many local banks, including Ameriabank, currently attract loans from international financial structures at floating interest rates, which are pegged to LIBOR (The London Interbank Offered Rate is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market).
And even the most insiginificant fluctuation of LIBOR causes quite serious growth in the bank's expenses on interest payment, as the bank provides loans to its borrowers at a fixed interest rate. Jrbashyan said that according to international analysts, by 2012 LIBOR will make up minimum 1.4%, and maximum 3.6%. That is to say, the funds borrowed by the local banks from international structures will grow in price by 3,6% by 2012, and this will have a certain effect on the interest rates inside the market.
At the press conference IFC Regional Head Thomas Lubeck said that the Corporation has agreements on making swap deals in 22 countries. In the region Armenia, in the person of Ameriabank, is the third country after Russia and Georgia.
The far-sightedness and professionals of the Ameriabank leadership allows the bank to adjust to the changing conditions of the market and maintain the leading positions in provision of innovative services, he said.
He explained that LIBOR is the London Interbank Offered Rate, and the decisions taken in London should not affect the mutual relations between the local banks and their clients. He added that IFC also hedges its market risks, but for a much lower payment (thanks to the high rating in the world), and this allows the Corporation to give an opportunity to the financial structures of developing countries to hedge their own risks at reasonable prices.
To note, focusing on investment banking, Ameriabank also provides the whole spectrum of universal banking services. Ameriabank's strategic partner is Troika Dialog Group, one of the largest investment and banking companies in Russia.
The majority shareholder of Ameriabank is TDA Holdings Limited affiliated with the Russian investment company Troika Dialog with 99.99% share of participation in the capital.
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