Increase of ARARATBANKs capital will start from 2016 and will last for 5-6 months

To note, the bank needs to increase the capital by 8 bln AMD to meet the new standard of minimal total capital - 30 billion drams to be introduced in 2017. Earlier David Haruthunyan informed ArmInfo, that 

ARARATBANK considers the possibility of purchasing another bank to meet the standard. "Before the decision of a new standard was introduced by the Central Bank, ARARATBANK had started searching a 

bank for purchasing 2-3 years before. It would ideal if we manage to find one, but if not, the shareholders in any case are ready to invest in the capital refilling and the bank will have no difficulties related to this, Haruthunyan said adding that all the majority shareholders will take part in the process. 

 

To note, according to the Financial Rating of Armenian Banks prepared by ArmInfo News Agency as of October 1, 2015 ARARATBANK's total capital made up 22.3bln AMD (1.7% yoy growth and 3.1% for the 9 

months alone). The registered capital totaled 8.3 bln AMD and this indicator has not changed since 2013.  The accumulated profit of the bank totaled 12.8 bln AMD with 3.2% yoy growth. European Bank for 

Reconstruction and Development holds 25%+1 of the bank's shares, 64.24% of the shares belong to Flash petrol trader (President Barsegh Beglaryan), and 10% to RURAL IMPULSE FUND II (part of Belgian Ickofin Investment Management-Incofin IM)

 

To recall, starting January 1 2017, a new standard of minimal total capital - 30 billion drams versus current 5 billion drams - will be introduced in the banking system of Armenia. The Central Bank Council 

made the given amendment to the provision 2 of the Law "On Regulation of the activity of banks and basic economic standards of the banking activity" on 30 December 2014.  The amendment will apply to all the participants in the banking system of Armenia. The banks have enough time to meet the new requirements. This tightening will lead to merger of banks and bigger actors will emerge in the banking sector, which, in turn, will ensure a higher quality and more accessible banking services and health- competition.  In addition, the banking sector will become more efficient and stable. Favorable environment will be created for introduction of new technologies and products, which will help involving Armenian banks into the international equity market and creating a basis for further enhancement of 

cooperation. The banks will become more flexible and resistant to economic shocks. This will promote also financial mediation.