ARARATBANK is considering the possibility to acquire another bank to meet the Armenian Central Bank's new minimum total capital requirement (30 bln AMD starting from 1 Jan 2017), David Harutyunyan, Deputy CEO of "ARARATBANK" OJSC, has told ArmInfo.
"2-3 years before the Central Bank tightened the total capital requirement, ARARATBANK had started searching for a bank to acquire. It will be perfect if we manage to find it, but if we don't, the shareholders are ready to invest in capital replenishment anyway. The Bank has no difficulties with it," says Harutyunyan. He added that all the majority shareholders will take part in the replenishment. By the latest data, the majority shareholders of "ARARATBANK" OJSC are Flash oil trader (President Barsegh Beglaryan) with a 64.24% stake, EBRD with a 25%+1 share, and Rural Impulse Fund II (part of Incofin
Investment Management-Incofin IM) with 10%.
Earlier (on May 11, 2015), Suma Chakrabarti, President of the European Bank for Reconstruction and Development (EBRD), said that the EBRD is going to participate in the process of consolidation of
Armenian banks before the CB's new requirement comes into force. He said that the EBRD is actively negotiating with some Armenian banks.
To note, according to the CB's requirement, starting from 1 Jan 2017, the minimum total capital of Armenian banks is to be no less than 30 bln AMD versus the current 5 bln AMD. The relevant decision was taken during the CB Board's meeting on 30 Dec 2014. It was dictated by the need to merge and enlarge the banks, which will enhance the Armenian banking system's efficiency and help the banks to resist various economic shocks.
According to the Financial Rating of Armenian Banks by the Agency of Rating Marketing Information (ArmInfo), as of 1 April 2015, ARARATBANK's assets amounted to 132.3 bln AMD, total capital - 21.8
bln AMD. In Q1 2015, the Bank secured a net profit of 405.7 mln AMD (almost 2-fold rise versus Q4 2014). (On 31 March 2015, the AMD/USD exchange rate was 471.13 AMD/$1).