ARARATBANK raises total capital to 33 bln drams due to issue of stocks

ArmInfo. ARARATBANK has replenished total capital by 8.5 bln drams due to issue of stocks. As a result the authorized capital of the bank has increased to 16.8 bln drams and total capital almost to 33 bln drams.

Thus, the bank has in advance met and even exceeded the minimum capital requirement to come into force since 2017. The press- service of the bank has told ArmInfo that two out of the three majority shareholders of the Bank-Flash oil trader and Rural Impulse Fund II participated in the issue. As result the share of Flash totaled 72.73% and share of Rural Impulse Fund II -8.58%. The share of the third majority shareholder EBRD dropped to 18.14% from previous 25%+1 share.

Prior to the issue the share of Flash oil trader was 64.24%, and Rural Impulse Fund II (part of Incofin Investment Management - Incofin IM) had a 10% stake.

According to the Financial Rating of Armenian Banks prepared by ArmInfo News Agency as of October 1, 2016 ARARATBANK's total capital amounted to 24.1 bln AMD with 7.9% growth in year-over-year term. In its structure the share of authorized capital totaled 34.6% or 8.3 bln drams and accumulated profit-53.1% or 12.4 bln drams. As a result of 9 months operation in 2016 the bank had 732.8 mln drams of net profit, of which 406.5 mln were received in Q3 ensuring 3-fold quarterly growth.

To note, Armenian Central Bank's new minimum total capital requirement (30 bln AMD versus current 5 bln) will come into force since Jan 1, 2017.  In this light Armenian banks are refilling their capitals also by mergers. ProCredit Bank and BTA Bank were the first to announce in the end of 2015 about merger with INECOBANK and Armeconombank respectively. In October 2016 Areximbank-GPB Group announced about leaving the market as Russian Gazprombank preferred to sell its subsidiary to Arshinbank, rather than undergo capitalization. As a result, as of November 21 2016 out of operating 18 banks (not considering Areximbank-GPB Group) only 12 banks have met the capital requirement. These banks are: Ameriabank, ACBA-Credit Agricole Bank, Ardshinbank, HSBC Bank Armenia, INECOBANK, VTB Bank (Armenia), Anelik Bank, Armbusinessbank, Unibank, Converse Bank, Armswissbank and ARARATBANK the total capital of which ranges between 33 and 62 bln drams. Most likely there will remain 17 banks in Armenia by 2017.