Yerevan /Mediamax/. Interview of the Chairman of the Board and CEO of “Armeconombank” David Sukiasyan to Mediamax Agency and Banks.am portal##

- Would you, please, tell us about the results of the recent visits to London and Washington?

- During my visits to London and Washington, over 20 meetings with heads of international banks and financial organizations took place, during which we both discussed the previously agreed programs and reached agreements concerning the implementation of new loan programs. The realization of those programs was somewhat delayed because of the internal political situation in Armenia and the global financial crisis, however, we plan to attract new resources within the framework of both new and the delayed programs.

- The major share of external loan resources, received by the bank last year, was directed to financing micro, small and medium enterprises. How does the distribution of those means proceed, what priorities are taken into account by the bank while selecting potential borrowers?

- One of the priority strategic directions of “Armeconombank” is the crediting of small and medium enterprises, for which the bank attracts means from international financial structures. By the way, the attracted means are already completely distributed.

The bank applies leading crediting technologies, which differ depending on the type of the credit. A great part in the formation of these technologies is played by the experience of our specialists, as well as by the technical assistance from international organizations. While providing credits, we take into account the experience of the borrower, the business stability, the crediting history, the sphere of activity, etc.

I would also like to note that consumer crediting is not our strategic priority direction, and the bank does not encourage increase of its presence in the given segment of the market.

- Continuing the topic of crediting small and medium enterprise, we would like to know, at what stage are now your plans on opening a specialized SME crediting center branch in Yerevan, and what new services will be offered to the given category of borrowers?

- The center for small and medium enterprise crediting was opened back last year; however, it started fully functioning this year. It is unique, since it is a place for preparing specialists in the given sphere. The center has already trained 40 specialists, who were sent to Yerevan and regional branches of the bank. In the course of three years we plan to train approximately 100 specialists, who will be financing within the framework of the micro-financing programs. The given process will be continuous, and we have great expectation from the micro-crediting center. I consider it worth mentioning that in the process of program realization we receive great support from the specialists of BFC, who help us both in selecting the personnel, and in implementing the programs. An own crediting committee functions in the center. It realizes crediting of small and medium enterprise within its limits.

- In conditions of growing competition, the Armenian banks started to attach great importance to implementation of new technologies. Aren’t those innovations premature, meaning that the population of the country does not yet have sufficient skills for their practical use?

- The leading banking technologies and innovations, already implemented in the financial market, are quite quickly adopted by the society. The efficiency of implementing any innovation is conditioned by the demand from the society, and the achievements already marked in the given direction, evidence that the implementation of new technologies and the provision of a new service quality became urgent requirements of the society. Taking this into account, “Armeconombank”, along with the provision of new services, also offers its customers free of charge consultations.

- Commercial banks of the country put forward the issue on the necessity to increase credit and deposit interest rates; moreover, the issue of lifting limits for the maximum allowed credit interest rate is being discussed. Would you, please, present the stance of “Armeconombank” concerning this issue?

- “Armeconombank”, in accordance with the market tendencies and taking into account the increase of interest rates in the local market, increased the credits rates. On average, depending on the credit product, the interest rates have increased for 2-4 percentage points. The increase of credit interest rates is conditioned by provision of equal competition conditions with market participants.

“Armeconombank” cooperates with large international structures and is inclined to form a banking portfolio with international resources. Concerning the rates on deposits, they remain unchanged, and we do not see the necessity to change those, since we have growth of volumes in attracted means in the domestic market, first of all from individuals.

- Today we hear contradictory opinions on the possible influence of the global financial crisis on the Armenian economy. A part of experts believe that the influence will be insignificant, others assure that the effect will be very serious and will negatively influence the Armenian banking system. What is your opinion concerning this issue?

-The influence is so far revealing itself in the form of certain difficulties in attracting means from external financial markets, which is the main reason for increasing the banking interest rates in Armenia.

Nevertheless, I consider it worth mentioning that the banking system of Armenia is capable of withstanding the global financial crisis due to its high level of liquidity and capital security. Let us also take into account the fact that the Central Bank of Armenia, being the regulator of the financial system of the country, realizes quite strict control over the banking system, and in case there is the global financial crisis influence, it will play a significant role in preserving stability and uninterrupted activity of the system.

- Not much time is left for the year to end. How can you describe the year of 2008 for “Armeconombank”? What main achievements and losses you can tell us about?

- The current year was marked by a number of events for the bank. In particular, as I have already noted, a crediting center was opened, which became a serious step along the path of increasing the quality of the crediting process realization. Branches in Yerevan and the regions were also opened. For the first time in Armenia, a joint call-center with “ArmenTel” was implemented and put into operation. Due to the telephone number 8686, our customers may receive information on the tariffs, the rates and others services of the bank 24 hours a day. In February, a loan agreement was signed with the Black Sea Trade and Development Bank, the means of which were directed to small and medium enterprise crediting. Agreements were concluded with the European Bank for Reconstruction and Development both within the framework of the co-financing program and for mortgage market crediting. We received another tranche from Atlantic Forfeiterungs AG credit organization, which was directed to trade financing. We continue actively cooperating with international structures; in particular, we plan a number of meetings at the annual Congress of European banks due in November in Frankfurt.