Interview of the Chief Executive Officer of "ProCredit Armenia" bank Bertold Hertzfeldt to Mediamax news agency and Banks.am portal

- A year ago you said that while making a decision to begin working in Armenia you saw opportunities, which the market gave in the sphere of rendering services to small and medium enterprises, as well as to ordinary people. Today, a year after beginning work in Armenia, to what extend have you managed to use these possibilities?

- A year ago, when we were opening the bank in Armenia, our main task was to become number one bank for small and medium enterprises, as well as for ordinary citizens.

Undoubtedly, we were very familiar with the Armenian market, as our company had been working here since 1999, we watched the market, economic development in general. Let me note that there was always interest towards Armenia, and the idea of opening a bank here had matured long ago, since "ProCredit" Group dynamically develops all over the world. Yes, the market gave us particular opportunities, since many people are not yet involved in the sphere of banking services. Many of them continue to keep their money at home, and it is very important to gain these people’s confidence, since we aim at long-term cooperation and development of savings culture in the country. During the last year we actively attracted both the representatives of small and medium enterprises and individuals. The results indicate that we laid a stable foundation to establish long-term relationships with our clients. We tried to gain customers’ confidence due to exactly professional services and affordability of our products.

I think we made our contribution to development of banking services, which were not enough developed in Armenian market, establishing warm atmosphere of service, rendering affordable and transparent services to the customers.

- You also said that you intended to present your bank’s development-oriented concept, which would render a full spectrum of services. Today, can one say that the bank renders entire spectrum of planned services in Armenia?

- 2008 was productive, since we developed and introduced a basic package of products, necessary for our customers, and we developed a number of innovations to meet credit customers’ needs. In February 2009, "ProCredit Bank" began to provide and maintain "VISA" plastic chip cards, the processing of which was implemented in Germany. Yes, I can announce that we achieved everything that was planned for the first year or work. But this does not mean that we are going to stop at what has been accomplished, we are moving forward. We will try to realize our neighbor-bank conception for all people, who live and work not far from our departments, an in addition, to be available and attractive for as many people as possible. As we have already announced earlier, we have not and will not actively work in the consumer credit market, since we do not consider this sphere of crediting to be the most priority one for us. Certainly, we will issue consumer credits, but mainly to clients, who have accounts in pour bank and who use our products. We actively dealt with increasing customers’ level of education, holding informational evenings on financial education for both adults and children. It is very important for us for people to understand banking services, and then only to make their choice. We were also actively involved in attracting representatives of medium enterprises and social companies, and to this end we opened "Teryan" branch under "Citadel" business-center, which deals with their maintenance. A special service package was elaborated and introduced for them.

- "ProCredit Bank" also announced that it intended to contribute to introducing saving culture in Armenia. Certainly, a year is a short term to achieve this goal, but, most likely you have provisional data. Will you, please, share with us?

–I will bring some data, which will speak for themselves better. During a year of activity deposit portfolio of "ProCredit Bank" made $ 9,9mln. Deposits of 80% of our investors make sums less than $1000. We think that every person, irrespective of the incomes, may save, set aside an amount and always have money for certain needs, or to purchase the desired thing. Saved money has to operate and bring profit. To this end, we celebrated International Day of Savings for the first time in Armenia in October 2008, putting a start to a tradition, which exists for already over 84 years in different countries. As I have already said, we are actively involved in financial education of both adults and children. Our employees organize informative evenings, where the importance of deposits is explained for the people, topics that interest them are discussed. We organize "Safari-tours" to our branches for high school students, where they can see the work of bank on-site and to ask questions they are interested in. Already since childhood we help them understand banking services and saving culture. I think we will achieve great results in the nearest future.

- Most likely, the crisis has made certain corrections in your plans in Armenia. Please, tell us about them.

- I cannot say that our plans have changed. We planned to open new branches, and we continue opening them, and naturally hiring and training employees, who will render quality service to our customers. Despite the fact that we always especially emphasized service personnel training, we plan to deal with trainings more intensively in 2009. We should provide as quality consultations to customers as possible and issue quality loans. I would like to note that in general we quite solidly stand on our feet, and none of 22 banks of "ProCredit" Group is actively involved in risky crediting and in securities market all the more. We will try to gain customers’ confidence using our professionalism and transparent banking services.

- Does "ProCredit" develop such products and services, which may be described as crisis preventive?

- The first crisis preventive weapon is our employees. We continue active investments in improving qualification of our employees. They are trained in both Regional Academy for Middle Level Managers, which is located in Macedonia, and in "ProCredit Holding" Academy in Germany. In addition, permanently exchange of ideas, experience and innovations takes place at the level of the whole group.

I cannot but mention products, which were developed and introduced to support domestic producers. At present, within the framework of campaign domestic producers may receive credits up to 15 000 000 AMD, for 18% annually. We considerably decreased interest rates for dollar credits, making them as affordable as possible. A specially formed group of our employees works with those of our customers, who have certain difficulties. They try to help the customer cope with difficulties. One of our main goals was and still is crediting of small and medium enterprises, we intend to help the representatives of business to stay and to develop stably in future.

In the sphere of deposit products we also revised some terms, making our products more attractive. Within the framework of the spring campaign the population may invest AMD deposits up to 12% annually in bank, and now the term of the deposit may start from 1 month.

- At present there is an opinion in Armenia that despite optimistic statements, actually commercial banks have abruptly reduced crediting volumes and toughened conditions. What changes have occurred in your bank?

- We have not reduced, moreover, we also actively advertise and issue credits, and on the contrary we made the terms much more affordable. Soon we are going to issue agro-credits, since this direction is also one of the priorities for us. So we have both optimistic statements and real approach. You may enter any of our branches, and you will make sure. In a year of activity in the Armenian market, "ProCredit Bank" acquired 4800 customers. At the end of March, credit portfolio of the bank made $21,4mln, 97% of them are credits less than $50 000. This is an exemplary index for small and medium entrepreneurs, who are the main target group for us. We hold open policy and continue their financing, since exactly they are the ones to create the most number of workplaces and are the pivot of Armenian economy.

- A year ago, information appeared that the bank would pay much attention to developing the regional branch network. What has been already done in this direction and what are the plans for 2009?

- "ProCredit Bank" opened 5 subdivisions in 2008: 4 in Yerevan and 1 in Vanadzor. We pay great attention to the availability of banking services in the regions. Vanadzor branch of "ProCredit Bank" is already popular in the region. In the nearest future we will open a branch in Gyumri. Also we hope that our future branch in Artashat will be actively involved in agro-crediting. We will not stop at this, and we will develop regional network of our branches in future.

- What is your assessment of the competition in the market of banking services in Armenia?

- 22 banks operate in such a small country as Armenia. And I cannot help noticing that banking system is rather developed in the country, and this makes the market of banking services quite competitive. On the other hand, any healthy competition brings to greater professionalism and improves terms for the customers. We have a quite positive mood and we believe that we will occupy our deserved place in Armenian financial market.