Thursday, October 27 2011 15:41
Investments from Diaspora need relevant business environment
ArmInfo. Interview with HSBC Bank Armenia CEO Astrid Clifford
The first international forum of Armenian banks has convened in the USA recently. HSBC Bank Armenia also attended it. What is your assessment of the forum? Did Americans take interest in the Armenian banks? What products have proved in demand?
Before the trip we had very little information on what to expect in the USA and if the Armenian Diaspora will take interest in our banks. Therefore, some bankers were certainly skeptical about the forum results. I must say that our skepticism disappeared as soon as we saw the number of the participants in the forum and their interest in Armenia. It was quite unlooked-for. The morning session involved 200 people, while the official dinner brought together nearly 1000 people. Diaspora representatives were seriously interested in investing in Armenia if the country's business environment meets their interests. In his speech the President of Armenia generally presented the business environment and economy in Armenia. The Central Bank, the Union of Armenian Banks and ArmSwissbank made relevant reports. Afterwards, a question and answer session was held. The organizers suggested HSBC Bank to represent the Armenian banks in the session. I think they chose HSBC Bank Armenia due to its 15-year-long experience and HSBC Bank's investments in Armenia.
What were the key questions at the session? Did you discuss implementation of any joint projects with American banks?
The questions covered various aspects of investments and revealed the problems that hamper new investments in Armenia. The Diaspora representatives shared their experience of work in Armenia, which, unfortunately, was negative in some cases because of the corruption risks in the country. Representatives of the Armenian banking system did not deny that factor. The Chairman of the Central Bank assured those present that together with the Government they will exert genuine efforts to resolve that problem and create transparent conditions for Diaspora representatives and guarantee protection of their interests against possible corruption risks. Representatives of the American business circles were concerned about another problem. In particular, in line with the law recently approved in the USA, all the foreign accounts of the U.S. citizens must be open for the American regulator. And the Armenian law on bank secrecy creates certain obstacles for them to invest in Armenia. Those present took an interest in the practical experience of HSBC in Armenia and it was very pleasant for me to tell about the 15 years of successful operation and annual profits of the bank with the average 31% return on capital and good perspectives of activity in the country. Actually, we have not faced any serious problems in Armenia and, maybe, everything is much easier for such a big player as HSBC. There were also issues related to mortgage lending and rural support.
Ms. Astrid, is it reasonable for the U.S. citizens to work with HSBC Bank Armenia while HSBC Bank is represented in several States? What do they think of the crediting rates in Armenia?
Well, HSBC Bank has a strong position in the USA. Specifically, the bank serves two branches in Los Angeles where the managers and many employees and customers are Armenians. I met with the managers of both branches who told be that many of their customers would like to invest in Armenia and they are very interested in the deposits, mortgage and other services of Armenian commercial banks. They did not demand any specific products, but the existing ones with some alterations and amendments. Nevertheless, we did not change our intention to introduce special offers for Diaspora representatives and not only in the USA. It would be useful to have meetings also with representatives of the Armenian Diaspora in France, Argentine and Russia to reveal the untapped potential of investments in Armenia.
As for the banking services in Armenia, the Diaspora representatives were pleasantly surprised at the 12% annual interest on mortgage loans since they expected that figure to exceed 18%-19%.
Ms. Astrid, are you going to offer any insurance product?
Together with Cascade Insurance we are working out a joint insurance product, which we plan to introduce till late 2011. In addition, we will continue to dynamic rates of lending to ensure the loan portfolio in the amount of US$268 million till the end of the year. The growth in the loan book will be due to $213mln to be spent on business financing and $55mln - on mortgage lending. Recently HSBC Bank Armenia agreed with the First Mortgage Company to refinance their mortgage loans, which will be good for both the bank and the company.
Thank you
By Lilit Aslanyan
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