Two large deals with EBRD and IFC will allow Ameriabank preparing for future IPO

 

Particularly, IFC is providing a $50 million subordinated loan to Ameriabank and EBRD is investing 40 mln USD in the acquisition of an equity stake in Ameriabank. The goal of the investment is to strengthen the bank and prepare it for future IPO. As a first step the EBRD will acquire a stake around 20% for 30 mln USD. The remaining 10 mln USD will be used for future capital increases. 

 

"We are delighted with IFC's trust. This transaction is a hallmark of quality for our bank operating in this market," said Andrew Mkrtchyan, Chairman of the Board of Directors at Ameriabank. "We are 

confident this cooperation has many avenues to explore for the benefit of our organizations and Armenia's banking sector." According to him Ameribank has attracted more than 500 mln USD from 

international organizations in recent years and EBRD and IPS are among its important international partners. "Signing of these two deals allowed the bank increasing its regulatory capital almost two-fold, which opens additional opportunities for enhancing crediting", Mkrtchyan added. 

 

Chairman of the Central Bank of Armenia Artur Javadyan, who attended the event, noted that signing of the above-mentioned deals testifies to the stable economy, which however develops slowly. "I think we 

managed to prove that business environment in Armenia is favorable for investments", he noted. 

 

 

Tomasz Telma, IFC Director for Europe and Central Asia, said: "By providing capital support to one of our key partner banks in Armenia, we endorse its growth strategy and future plans. This cooperation is 

part of our efforts to increase the stability of Armenia's banking sector, which is critical for broader economic development." By providing long-term capital support, IFC aims to increase the stability of Armenia's banking sector and support the strategic goals of Ameriabank, its valued partner.Considering the quality of Ameriabank's corporate governance, coupled with solid growth, IFC's subordinated loan will help the bank grow and prepare for an initial public offering.

 

 

Till the beginning of possible stock listing EBRD investments will support growth of Ameriabank by providing additional funds for crediting of large corporate and private clients, small and medium 

enterprises and retail clients. The project will serve for the consolidation and straightening of the banking sector of the country with the help of merges and acquisitions. EBRD's joining will also 

contribute to improving corporate management as an independent director representing EBRD will join Ameriabank's Board of Directors. 

 

To recall, according to the results of the Bank's activities for 2015, the Bank retains leadership in such key financial parameters as assets (more than $1 billion), lending (290.2 billion drams with a 40.1% year on year growth) corporate financing (250.7 billion drams, with a 45.4% year on year growth),  general obligations, lending, investment in securities, and payables to the customers. In addition, 

the Bank is confidently advancing to leading positions in terms of net profit, total capital, authorized capital, interest and non- interest incomes.  Efficient lending helped the bank increase profits 

by 11.2% and reach 5.1 billion drams for 9 months of 2015.  The bank is in the TOP-5 by ROA - 2.07% (4th rank), and ROE - 17.24% (2nd rank).  With EBRD entering its capital, Ameriabank will become the 

leader by total and statutory capitals too. So far, before the EBRD's investments are registered, the bank's shareholder is Ameria Group CY Ltd - 100%.  As an absolute leader in the market by assets, loans, liabilities and deposits, Ameriabank provides full- fledged solutions in corporate, retail and investment banking. Having multiple excellency awards by Euromoney (2014, 2012, 2011), Global Finance (2015, 2012, 201 3), The Banker/FT (2015, 2013, 2010), Ameriabank is committed to invest in cutting-edge technologies and unparalleled customer service.  Ameriabank and EBRD launched cooperation in 2010. Since then, the Bank received financing through TFP for trade, SME and energy efficient projects. Ameriabank has raised $345 million from international financial institutions in total.

 

 

Since the start of its operation in Armenia in 1992, the EBRD has invested over 1.04 billion EUR in 148 projects un the country's financial, corporate, infrastructure and energy sectors, with 88% of these investments being in the private sector. 

 

Armenia became an IFC member in 1995. Since then, IFC's long-term investment commitments have totaled $340 million, including $22.8 million mobilized from other lenders, financing 47 projects across a range of sectors, including financial markets, manufacturing, agribusiness, services, and mining. IFC has also supported trade transactions worth more than $122 million through its trade finance program, and implemented advisory projects focused on private sector development.