Saturday, August 11 2012 14:44
Chairman of Board of Converse Bank: Unequal conditions for business disturb banks to distribute and place resources successfully
ArmInfo. In 2012 Converse Bank is going to increase its portfolio mostly at the expense of retail and financing of small and medium enterprises, Chairman of Board of Converse Bank Tigran Davtyan told ArmInfo.
He said that the Bank will not exclude large corporate loans from its main business line, but the main focus will be on the retail. At present the Bank is going to considerably increase provision of car loans, mortgages and loans to SMEs.
"Certainly, the past crisis-affected years had an impact on our portfolio, as the customers had certain difficulties, and, as a consequence, we had to write off the bad loans. Our conservative approach was unambiguous - in order to avoid risks, it was necessary classifying more loans than enough. Therefore, in 2011 we wrote off many loans", he said. Davtyan added that since the beginning of crisis in 2008, the bank has not stopped the lending, constantly trying to assess the risks correctly. "The whole range of loans has always been operating, and we try not to be behind our competitors, but, on the contrary, to offer new credit products to the market constantly", he stressed. He pointed out that while the provision of car loans was almost frozen throughout the banking system during the crisis period, the Bank did not stop providing car loans, moreover, new agreements were signed with car traders and a branch was opened to serve the traders of Ladas (Russia), Opels (Germany) and Hyundais (Korea). The Bank keeps on working in both the primary and the secondary market of car loans. "We have worked out a new system of lending by installments, which radically differs from traditional lending by its philosophy and technologies. We have borrowed the new scheme from abroad. Certainly, we have added our Armenian mentality and our realities to the system. The lending for acquisition of goods by installments is actually one of the hazardous banking spheres today, but we think that we have assessed it correctly", he said.
As regards financing of SMEs, Davtyan agrees with the ArmInfo correspondent's opinion that the representatives of small and medium business seldom come across the classical market risks lying in base of business program and need credit resources, and often come across unpredictable system risks, including the force pressing by the competitor-monopolists, arrogation of the audit bodies, unequal "rights" of tax administration, customs barriers, etc. "Some pay taxes, others don't. Is this a competition? Who does not pay taxes, his commodities are cheaper, and in the course of time he "takes away" the whole market and becomes a monopolist. All this seriously disturbs the banks to distribute and place the resources successfully. I am convinced that SMEs are the key source of economic activity, if it is not so well developed, the economy is sick", Davtyan said.
According to the Ranking of Armenian Banks by the Agency of Rating Marketing Information, as of 1 July 2012 the lending of Converse Bank totaled 60.4 bln AMD (12.5% growth for Q2 2012, 11.7% growth for I half of 2012). In the credit portfolio, 6.2% or 3.750 bln AMD fall on SMEs (almost 10-fold growth over I half of 2012, and 27.2% growth over Q2 2012). By mortgage lending, the Bank holds the 5th position in the banking system of Armenia. The share of mortgage loans in the Bank's loan portfolio is 18.3% or 11.1 bln AMD (14.3% growth over I half of 2012, and 11.3% increase over Q2 2012). The total capital of the Bank grew by 4.1% over I half of 2012, and by 3.4% over Q2 2012, having totaled 17.2 bln AMD by late June. The assets of the Bank amounted to 95.4 bln AMD (7.7% growth over Q2 2012 and 30.7% decline over I half of 2012).
To note, Converse Bank CJSC is a member of Eurnekian Group. The holder of 95% of shares of Converse Bank is Advanced Global Investments LLC (headed by Eduardo Eurnekian), and the other 5% belong to the Mother See of Holy Etchmiadzin.
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