ArmInfo.HSBC Bank Armenia CJSC (HSBC Armenia) has strong principles of corporate social responsibility. In line with these principles, the bank has recently held an Open door event to increase the financial literacy in community and ensure awareness of banking services and products. During this event, the bank's management presented to visitors a number of topics including effective management of savings, clients’ rights protection, management and risk assessment of banking products and cost optimization.
HSBC Armenia attaches high importance to financial literacy as one of the prerequisites of success in the modern world. HSBC Armenia’s Deputy Chief Executive Officer/Chief Risk Officer Aram Pinajyan explained in detail the activities and development plans of the bank in an interview to our ArmInfo correspondent.
The report on the credit risk of HSBC Armenia, published at year end 2018, indicates a reduction in the volume of non-performing loans. And judging by the sharp increase in profits (from loss making to profit), we can conclude that the bank managed to solve the problem of non-performing loans through repayments, rather than write-offs. And since the bank does not publish credit risk by economic sectors, and the dominant part of loans are accounted for by industry, trade, catering and the service sector, it would be interesting to learn about the quality of loans to these sectors.
You have rightly noted that in 2018 a significant reduction in the share of non-performing loans was recorded in the loan portfolio of HSBC Armenia. I would like to emphasize that this was the result of the return of a notable share of such loans, which was partially caused by improvements in the country's economy. But basically this was ensured by specialists who, by maintaining an active dialogue with problematic clients, were able to find the most efficient and profitable solutions not only for the bank, but also for the borrowers themselves.
As for the second part of the question related to the indicated sectors of the economy, no specific risks were recorded, and a roughly proportional reduction of this portfolio was seen across all sectors.
What clientele does HSBC Armenia intend to focus on in 2019 - individuals or legal entities? And what are the reasons of this?
As in the previous years, in 2019 as well, HSBC Armenia intends to increase its market share in three main areas - banking retail services, wholesale banking including trade finance and financial market operations. We expect growth both from cooperation with retail customers and from partnership with corporate ones. The bank will continue to actively provide international trade finance services, adhering to its long-term policy of supporting international commerce.
Why did HSBC Armenia reduce investments in such key sectors of economy as industry and the agricultural sector, while activating trade and services financing? And if this trend continues in 2019, what are the reasons for it?
I want to emphasize that according to the results of 2018, the loans placed by the bank in the industrial sector occupy the second place in terms of share in the total portfolio (about 20%).
Being a member of an international group, HSBC Armenia adheres to the investment policy developed by the HSBC group, which envisages greater involvement in some areas and limited participation in others. This approach is determined by the specifics of the domestic market and the prerequisites for development. In total, the bank's policy is aimed at diversifying the loan portfolio and ensuring a presence in various sectors of the Armenian economy.
In 2019, we consider wholesale and retail trade (referring to export and import), services (including transport and communications), industry and energy, as well as financing the purchase of residential real estate as the main areas of growth.
What are the main tasks (priorities) for 2019 laid down in the strategic development plan of HSBC Armenia?
HSBC Armenia will continue to follow its mission, which is maintaining the status of a leading international bank in Armenia. The goal of the bank is to participate in the development of the economy by promoting entrepreneurship, opening up new opportunities for customers and businessmen, and creating the prerequisites for development.
HSBC Armenia will continue working closely with other banks and financial institutions of the HSBC Group in order to provide customers with a wide range of quality banking services.
The bank will continue adhering to strict qualitative and quantitative criteria in the context of compliance with the law and the prevention of financial crimes (money laundering, sanctions, corruption), as well as ensuring effective management and control of operational and credit risks.
What growth of assets, credit investments, profits are you planning to ensure in 2019?
The goal of HSBC Armenia is to be profitable and to take a market share envisaged by the development strategy in the areas that are priority for us. As I noted earlier, the Bank seeks to promote business development and open up new opportunities for entrepreneurs, while at the same time creating strong foundations for economic development.
Do you feel that the customers make a shift towards remote service channels in Armenia? Is the bank giving a greater preference to these channels and what services have already become remote? Could this be the reason for the reluctance of HSBC Armenia to expand its branch network?
I want to note that in recent years there has been a sharp increase in the volume of remote / digital banking services.
One of the key areas of development for HSBC Armenia is the introduction of digital technologies. The range of digital services of the Bank includes the most popular non-cash financial transactions, such as transfers, opening of urgent deposit accounts, secure communication with the Bank. According to the latest statistics, over 57% of retail customers and over 80% of corporate clients of HSBC Armenia actively use digital banking services. This, in turn, eliminates the urgent need to expand the branch network.