Armeconombank increases its regulatory capital to 23 billion drams after merger with BTA Bank (Armenia) and IPO

To recall, on December 30 2015, Armeconombank's regulatory capital was 13.3 billion drams, the one of the BTA Bank (Armenia) it has amalgamated was 5.4 billion drams. 

 

Naljyan said that to meet the Central Bank's new minimum capital requirements of 30 billion drams, the Bank plans to launch another IPO for 7 billion drams and complete itapproximately in October. Along with this, Naljyan said, negotiations are held with the EBRD for participation in Armeconombank's capitalization and possible restoration of its share in the capital to the previous 25% from the current 15%.  A positive outcome of these talks will ensure for the 

Bank a total capital exceeding the minimum capital requirement for 2017.  In addition, he said, the Bank is currently negotiating with two banks over amalgamation. As part of the project Supporting Consolidation in Armenia's Banking System, EBRD can participate in this process too.  

 

Naljyan said the capital stock of Armeconombank OJSC has not changed after merger and IPO: about 70% stake belongs to the Sukiasyans Family - the owners of SIL Group multi-profile concern, 15% belong to EBRD, with the remaining shares belonging to minority shareholders. 

 

An extraordinary Assembly of Shareholders of Armeconombank and BTA Bank (Armenia) on March 18 approved the merger of the two banks under the brand Armeconombank.  The agreement on it will be submitted to the Central Bank's approval within the coming days.  

 

To recall,  BTA Bank (Armenia) was founded in June 2005 as a subsidiary of Bank Turan Alem, Kazakhstan. The shareholders are Bank Turan Alem (65.2%) that underwent restructuring in 2010, Austrian ZRL Betaligunds GmbH - 31.3%, AMK Invest - 3.7%. The accumulated loss of BTA Bank (Armenia) increased to 1.3 billion drams as of Jan 2016.  

 

To recall, Armeconombank is one of the oldest banks in Armenia - as a result of the reorganization of the USSR banking sector, the Armenian branch of the former USSR (Zhilsotsbank) was created and ARMECONOMBANK became its legal successor. The Bank was registered at the Central Bank Armenia as an open joint-stock company (Registry 

No.1). In 1997, the Sukiasyans Family became the majority shareholder of Armeconombank. In 2004, an Agreement was signed between ARMECONOMBANK OJSC and European Bank for Reconstruction and Development (EBRD). The participation of EBRD in the Bank's chartered capital made up 25%+1 share. By the end of the investment period, EBRD started reducing its share and fixed it at 15%. As of Jan 1 2016, the Bank's customer based exceeded 130,000 corporate and private customers, with the staff reaching 865 people.  The Bank serves 40 branches, including 19 in Yerevan, 20 in the region, and one in NKR. The Bank's assets totaled 108.8 billion drams, personal deposits (call liabilities and times deposits) totaled 64.5 billion drams. In 2015, Armeconombank had 368.8 million drams net profits. The Bank's ROE totaled 2.95% in 2015, ROA - 0.36%.