Tuesday, February 20 2024 15:26

ArmInfo. The HSBC group has been moving its capital and focusing on its preferred markets, as has been the policy in recent years. Only since 2021, as noted by the Chairman of the Union of Banks of Armenia (UBA) Daniel Azatyan during a press conference, the Group has withdrawn from 7 countries, including retail lending in France, the USA, Greece, etc.

Armenia, according to him, is the last country in the CIS where the  Bank's representative office is closing.

"This type of deal is not a decision that was made in 10 days.  Discussions and negotiations lasted a very long time and took place  in accordance with international standards. This is a very difficult  and lengthy job that needs to be treated with respect," he said.

Ardshinbank, the largest Armenian banking group, is today announcing  it has reached a binding agreement with HSBC Europe B.V., a  subsidiary of HSBC Holdings plc, to acquire its fully owned banking  subsidiary in Armenia.

HSBC Armenia has a well-established base of loyal clients across  Armenia and specialises in serving affluent retail customers and  blue-chip Armenian corporates. Historically orientated towards  corporate customers, its growth over the recent years has been driven  by its wealth and personal banking proposition.

The proposed acquisition of HSBC Armenia is a unique opportunity to  build upon Ardshinbank's operational and financial strengths. The  combination aims to add a high-quality customer franchise and a  highly experienced team of relationship managers and employees. As at  December 31, 2023, HSBC Armenia had total assets of c. AMD290bn,  customer loans of c. AMD185bn and c. AMD200bn in customer deposits.

The transaction is subject to regulatory and anti-trust approvals and  is expected to close within the next 12 months.

Artak Ananyan, Chairman of the Management Board of Ardshinbank,  commented: 

"We are delighted to announce today that we have reached agreement  with HSBC for the acquisition of its bank in Armenia. Subject to  receipt of all clearances, Ardshinbank looks forward to welcoming  HSBC Armenia customers onto our award-winning platform and to further  delivering on its strategy to accelerate growth and expand product  offering for clients. This transaction is about growth and we look  forward to welcoming HSBC Armenia employees to the Ardshinbank team.  Our intention is to ensure a smooth and fluid transition for all HSBC  Armenia customers who will continue to enjoy the benefits of local  support and personalised services and Ardshinbank's bespoke range of  products."

Established in 1996, HSBC Armenia is the only local commercial bank  controlled by a major Western banking group. It currently has total  assets worth 290 billion drams ($720 million) and around 200 billion  drams in customer deposits.HSBC Armenia's net profit rose from 8  billion drams in 2022 to over 11 billion drams ($27 million) last  year. By comparison, Ardshinbank reported nearly 63 billion drams in  earnings in 2023.

According to the head of the national rating agency AmRating,  Emmanuel Mkrtchyan, the exit from the market by HSBC, which in the  late 90s instilled international banking standards in Armenian  bankers and taught literacy, can be called the worst case that has  occurred in recent years in the Armenian economy.

After all, before HSBC, other institutional banking investors  gradually left Armenia, including the German ProCredit Bank, which  continues to operate quite successfully in Georgia, Moldova, Ukraine  and Eastern European countries, as well as Credit-Agricole Bank,  which exited the capital of Acba Bank. Such international financial  donors as EBRD and ADB, which remained only in the capital of  Ameriabank, as well as IFC, KfW and other smaller ones such as  Incofin, greatly reduced or completely eliminated their presence in  banking capital.

"It is not necessary to unequivocally negatively assess the  withdrawal of donor organizations from banking capital, since it was  thanks to their help, financial and advisory support that the  formation of the country's banking system took place. However, the  exit of strategic institutional financial and banking holdings is  nothing more than a litmus test of the state of the national economy.  After all, as a rule, such large banks do not operate in the consumer  and pawnshop loan markets; they are interested in serious strategic  medium- and long-term investments in the real sector of the economy,  and Armenia today has nothing to brag about in this sense," he said.