INECOBANK explains: One of key prerequisites of merger with ProCredit Bank was similarity of corporate governance culture and availability of professional teams

 

The Bank stresses that in the business environment such transactions are made amid integration processes of the merged banks. In particular, the matter concerns integration of their resources with 

due regard for growth of business and opportunities of development. "This process is already underway and we are sure that INECOBANK will eventually strengthen its positions even more and the investment in development of Armenia's economy will become more tangible," the Bank says. 

 

It also points out that INECOBANK's acquisition of the 100% stake in ProCredit Bank from ProCredit Holding in Dec 2015 was based on the aspiration to create new opportunities for development and 

strengthening of the positions on the market rather than on the striving to meet the CBA requirement (the CBA's requirement on the minimum total capital of 30 bln AMD will come into effect on 1 Jan 2017). 

 

The first result of the merger is the fact that the Bank has taken the lead in MSME lending. This has created favorable conditions for enhancement of the service quality.    

 

To note, by early 2016, the total capital of INECOBANK (by IFRS) amounted to 40.7 bln AMD (versus the CBA requirement of minimum 30 bln AMD starting from 2017). The merger with ProCredit Bank (Armenia) is being held in two stages. The first stage is already over - on December 14 ProCredit Bank (Armenia) was acquired and on December 16 the EBRD was registered as a stakeholder. The second stage will be of technical nature - the merger process will be over within 3 months. 

 

 

As the EBRD has joined the capital of INECOBANK, the stakes of the majority shareholders have been distributed in the following way: the summary stake of the two large shareholders - Avetis Baloyan and 

Karen Safaryan - is a bit higher than 51% (versus the previous summary 65.57% stake), the EBRD's stake made up 22.7%, and the stakes of the other investors - DEG and IFC, which took no part in the deal, - have naturally declined. As a result, the Bank now has 11 shareholders. 

 

In 2015, INECOBANK's assets grew by 48% to 236.6 bln AMD, with over 65% of this amount being the lending (154.7 bln AMD). At the yearend of 2015, INECOBANK demonstrated a net profit of 4.8 bln AMD, 

retaining its position in the Top-3. Founded in 1996, "INECOBANK" CJSC is one of the most dynamically developing banks on the financial market of Armenia. ProCredit Bank joined the Armenian banking market on 5 Feb 2008. It was guided by the credit policy of ProCredit Holding AG and specialized in SME lending.