Areximbank-Gasprombank Group Propelling its Statutory Capital to a Leading Position

Areximbank-Gasprombank Group is propelling its statutory capital to a leading position and its total capital into the TOP-5. The statutory capital of the bank is to be replenished by 4.7 more bln AMD or 10 mln USD. The bank's press-office has informed ArmInfo that the decision was take during the June 30 extraordinary meeting of the shareholders of Areximbank-Gasprombank Group.

The only shareholder - the Russian "Gasprombank" - is to replenish the capital through the additional issue of 90 400 ordinary stocks.  Due to the issue the factual statutory capital of the bank will total 30.6 bln AMD or about 65 mln USD. Due to this the bank will become the leader of the sector.

According to the Financial Rating by the Agency of Rating Marketing Information (ArmInfo), as of Apr 1, 2015 the total capital of the Areximbank-Gasprombank Group totaled 25.6 bln AMD (position 8), statutory capital - 25.9 bln AMD, assets - 107.3 bln AMD, loan investments - 75 bln AMD, liabilities - 81.8 bln AMD. The bank finished Q1 2015 with 157-mln-USD net profit. In Q1 2015 the bank's capital increased by 60.1% through replenishing the statutory capital by 57,4% amid shortening the accumulated loss by 14%. During Q1 2015 (particularly in Jan) Areximbank-Gasprombank Group increased its statutory capital by 20 mln USD extra capitalization issue, which resulted in the bank's 25.9 bln AMD. This has provided a better position and indicators in TOP- 3.  The previous capitalization took place in mid-2013 - the statutory capital was increased by 25% up to 16.5 bln AMD.

To note, the Central Bank of Armenia increased the minimal capital requirement of banks to 30 billion drams starting Jan 1 2017 (versus the current 5 billion drams). The decision aimed to ensure positive effect of the capital, make the banking activity more efficient and the banking system stable and flexible.  To meet the requirement, the banks may merge as well.

Areximbank - Gazprombank Group" CJSC has been established in 1998 to support the business and manage financial flows between Russia and Armenia. In Nov 2007, one of the largest Russian banks - "Gazprombank" (Open Joint Stock Company) acquired 80% stake in the bank and increased it to 94.15% in July 2008. In Sept 2008, the bank acquired the remaining 5.85% stake from Raiffeisenbank.