ARARATBANK shareholders prefer capitalization to paying dividends to shareholders

ARARATBANK has decided to settle the problem with capitalization at the expense of the profits for 2014 to meet the CB's new minimal capital requirement instead of paying dividends to shareholders. The decision was taken by the majority of votes during the annual meeting of ARARATBANK shareholders on June 26. Majority shareholder of the bank Barsegh Beglaryan (64.24% in the capital of the bank) said that the bank had been paying dividends to its shareholders over the past few years.  The decision on passing of the past-year dividends has been taken in order to fulfill the CB minimal capital requirement. The total capital is to make 30 bln AMD by 2017 (against the current 5 bln AMD). 

During the meeting David Harutyunyan, Deputy Executive Director of Araratbank, said that 600 mln AMD out of 2.843 bln AMD 2014 profit (against yoy 3.083 bln AMD) will be channeled at replenishing the reserve capital. At the end of 2014 the bank maintained its leading position in the market. In 2014 the assets of the bank totaled 138.4 bln AMD with 10.5% yoy increase. The total capital has been increased by 10.4% up to 21.7bln AMD. The general obligations of the bank increased by 10.5% up to 116.7 bln AMD. In the structure legal entities' demand obligations have totaled 27.8 bln AMD (with 18.2% yoy decrease), individuals' - 10.7 bln AMD (with 27.4% yoy increase).  Period money for legal entities has reached 4.4 bln AMD (with 18.9% yoy increase), individuals' - 22.7 bln AMD (with 2.2% yoy increase).  Loan investments have been increased by 10,7% up to 66 bln AMD, including retail ones - by 14,4% up to 30.2 bln AMD, corporate ones - by 9,6% up to 37.4 bln AMD.

The 2014 ROE of the bank totaled 14,1% (against yoy 17,2%), ROA -2,3% (against  yoy 2,6%).  By the end of 2014 the number of ARARATBANK clients totaled 207 595 with 13,4% yoy increase. Over the reported period the number of the bank's issued plastic cards has been increased by 9,2% up to 128445 pieces. In 2014 the bank opened two branches. By the end of the year there were 49 units, in 2015 the number increased up to 50. 23 branches are located in regions.

Chairman of the bank Ashot Osipyan spoke of their further strategic plans saying that the bank is intending to acquire another bank to fulfill the CB's requirement. The bank is also determined to enter the London alternative market, develop  internet-banking and mobile-banking services, as well as open more branches.

According to the data of Financial Rating of Armenian Banks prepared by Arminfo, as of April 1, 2015 the assets of ARARATBANK totaled 132.3 bln AMD with 0.4% yoy growth. By the end of Q1 2015 the share of investments in valuable security sin the asset structure reached up to 13% or 17 bln AMD with 30% yoy growth, 12% was provided in the Q. By April 1, 2015 the bank obligations totaled 110.5 bln AMD with 0.6% yoy decrease, the total capital - 21.8 bln AMD with 6^ yoy growth. The bank finished Q1 2015 with 405.7 mln AMD net profit with 63.2% yoy fall (2-fold Q growth). As for ROA and ROE, in Q1 2015 the bank become one of the leaders with 1.198% and 7.72% respectively.  By the recent data, the majority stakeholders of ARARATBANK are "Flash" company with 64.24%; EBRD - 25% + 1 stock and Rural Impulse Fund II (part of Belgian Ickofin Investment Management- Incofin IM) - 10%.

(The exchange rate of AMD/USD on Dec 31 2014 was 474.97AMD/1USD, on Mar 31 2015 - 471.13AMD/1USD).