Thursday, July 19 2012 19:44

Araratbank borrows from EBRD AMD loan equivalent to $7mln


ArmInfo. Araratbank has borrowed from EBRD $7mln in AMD equivalent for stimulating SME and agriculture.

The credit agreement was signed by CEO of Araratbank Ashot Osipyan and Head of EBRD Yerevan Office Valeriu Razlog on Thursday.

Razlog said that the peculiarity of this loan is that it is in AMD, i.e. Araratbank will be able to issue long-term loans in national currency.

Razlog said that EBRD's goal is to reduce currency risks for its partner banks and their customers.

He said that lending in AMD is one of the components of EBRD's new strategy for Armenia for 2012-2015. The bank will provide more and more loans in AMD as this is much more beneficial for customers.

As of today, EBRD has lent Araratbank a total of $20mln.

Osipyan said that $1mln out of $7mln will be allocated for business projects in agriculture. The agricultural loans will be issued for 3-5 years at 14-15%, with the maximum size being $300,000.

Osipyan believes that lending in AMD will improve banking intermediation in Armenia and will help local banks to avoid additional currency risks. Due to this program Araratbank expects to increase its AMD loan book by 5-7%.

For the moment the bank is cooperating with the World Bank, EBRD, ADB and some other international structures under a total of 14 international credit programs. 40-45% of the bank's loans are loans issued in the framework of international programs.

According to Araratbank, in Q1 2012 the bank's assets grew by 25% to 109.4bln AMD, loans by 26.3%, deposits by 11.8%. The clientele grew by 10% to 155,000 customers. In Jan-May 2012 the net profit totaled 1.859bln AMD. ROE made up 28.3%, ROA 3%.

Araratbank has 41 branches. Its majority shareholders are Flash oil trader (74.1%) and EBRD (25%+1).

In 2012 EBRD is planning to invest $120mln-125mln in the Armenian economy.
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