ArmInfo. The Central Bank of Armenia has approved the merger agreement of ProCredit Bank and INECOBANK. The press office of INECOBANK told ArmInfo on April 28 that the Central Bank Board approved the merger agreement on April 26, 2016.
The merger process was launched in December 2015 following the signing of the bilateral agreement on INECOBANK's acquisition of ProCredit Bank's 100% stake owned by ProCredit Holding.
"The merger process of the two banks is nearing completion and starting from May 2016 the merged bank will function under the INECOBANK brand," Chairman of the Management Board of INECOBANK Taron Ganjalyan says, noting that INECOBANK has strengthened its team of professional specialists, extended its range of attractive products, and enhanced the efficiency of internal processes. "Demonstrating the leading indices in ROE and ROA for two years running, INECOBANK has also registered serious achievements in a number of directions following the acquisition of ProCredit Bank. The first result of the merger is the leading positions in micro- and SME lending, which has made it possible to enhance the quality of the services, including through expansion of the branch network. Due to the merger, the total capital of the Bank has considerably grown, exceeding the minimum threshold - over 12 bln AMD (versus the required 30 bln AMD effective on 1 Jan 2017)," he says.
As of 13 Jan 2016, the shareholders of INECOBANK were Avetis Baloyan with a 27.4% stake (chairman of the Bank's Council), Karen Safaryan - 23.67% (member of the Council), EBRD - 22.7%, Deutsche Investitions und Entwicklungsgesellschaft - 9.58%, IFC - 7.1%, Vruyr Grigoryan - 3.81%, Aram Manukyan, Vardan Manukyan and Nune Gevorgyan - 1.29% each, Aghavni Zurnachyan and Alla Boyajyan - 0.92% each.
According to the Financial Rating of Armenian Banks by the Agency of Rating Marketing Information (ArmInfo), in 2015 INECOBANK increased its total capital by 56%, authorized capital - by 85.1%, assets - by 48.1%, lending - by 42%, liabilities - by 46.5%, time deposits - by 77.1%, net profit - 4.8 bln AMD (3rd position on the market), with 1.4 bln AMD of this amount registered in Q4 2015. In the loan book of the Bank, the share of lending to economy sectors was 71%, with 29% being retail lending. In 2015, the Bank increased the corporate lending by 56.8%, and retail lending - by 19.3%. In SME lending, INECOBANK rose to the 3rd position with 75.8 bln AMD (2-fold growth in 2015 due to merger with ProCredit Bank in Dec 2015). In terms of efficiency ratio, INECOBANK retained leadership in 2015, securing its ROE at 18.72% and ROA at 3.06%. (The average AMD/USD exchange rate was 483.75 AMD/$1).
As of 1 April 2016, INECOBANK held the 5th position in terms of total capital - 42.1 bln AMD, 6th position in terms of authorized capital (22.3 bln AMD), 7th position in terms of assets and liabilities - 226.8 bln AMD and 184.7 bln AMD, respectively, 5th position in terms of accumulated profit - 14.7 bln AMD, 2nd position in terms of net profit - 1.2 bln AMD (the average exchange rate was 480.79 AMD/$1).
Established in 1996, INECOBANK holds the leading positions in the banking system of Armenia in servicing individuals, as well as micro- and SME entities. It has over 200,000 individual customers and over 9,000 business clients. INECOBANK was the first Armenian bank to provide loans for acquisition of goods by installments, thereby stimulating the development of the consumer goods market. INECOBANK cooperates with more than 30 international organizations.