Exclusive interview with Astrid Clifford, HSBC Bank Armenia cjsc CEO, to Mediamax News Agency and the Banks.am web portal 

- Recently you became the CEO of “HSBC Bank Armenia”. What issues demand your priority attention as the new head of the bank?

Last year was a difficult one for Armenia, with a 15 percent contraction in the economy and a 20 percent devaluation of the Dram.  There was a lot of uncertainty and so we were quite cautious during the year in terms of lending, particularly in drams as we did not have sufficient AMD deposits. So overall business growth was modest, and we focused instead on re-engineering our processes, getting our operations in good shape etc.

This year, things are looking more positive and there is a general expectation that the economy will grow, albeit modestly. We have set some stretching targets for the year. So, we need to shift the focus again to business development. We plan to be very active in the market, looking for quality lending opportunities, because the focus will always be on quality. Another priority is to grow our AMD deposit base.

- What assessment would you give to Armenian financial system in whole? What is HSBC Bank Armenia’s place in it?

- My first impression is there are too many banks in Armenia  22 banks is a lot for a small country. There could be some real benefit from consolidation. The banks seem to be well capitalized and well supervised. The market here is not very well integrated with the rest of the world, and that probably provided banks with some immunity from the crisis last year.

In terms of our place in the market: we came to Armenia in 1995 because we saw good opportunities here and it has been a very positive experience for us so far. We are the largest bank here in terms of deposits, which is a reflection of the confidence people have in our brand.  Because of our international presence, we believe we are uniquely placed to serve customers with international needs - trading companies, the Armenian diaspora etc.

We would also like to think that we set the standard in terms of service quality. For example, we provide a Direct Link to the CEO, which allows customers to contact me directly. Customers can leave their comments either in the boxes permanently placed in the branches or contact me via the web site link.  Of course, we make mistakes sometimes, but the important thing is that we try to learn from those and continuously improve our service. We also try to lead the market in terms of technological innovation e.g. with the launch of internet banking last year.

- Coming back to this issue of integration to the world market and the crisis issue in general, a year ago, we were talking here with your predecessor Tim Slater and his idea was that Armenian economy was very much dependent on Russian economy. So, if the Russian economy is going to sustain and is going to develop, everything will be more or less ok here as well. So, what do you think about that and about the influence of the crisis? Is it going to continue or will this year be a calmer year of stabilization?

- We hope that the worst of the crisis is behind us and we are in a period of stabilization. Yes the Armenian economy is quite dependant on Russia and what happens there, and on other parts of the world too in terms of inward remittances etc., but the world economic outlook is generally more positive.

- They spoke about this much recently that Armenian financial-banking system could be sustainable during the crisis here in 2009, but some people think that there is still a huge gap between the banking system and the real economy. They say that banks are reluctant to pour more money to real economy. Do you think such problems really exist or are the banks simply assessing their risks and nothing more?  

- A lot of banks had injections of capital last year, and now they are well capitalized. So this investment is a positive sign. My understanding is also that banks were generally quite supportive of businesses last year, and continued to lend despite the crisis and all the uncertainty at the time. We are certainly noticing quite a lot of competition in the market now, for all kinds of commercial lending, so I don’t get the impression that banks are being overly risk averse.

- Before coming to Armenia, You were the Regional Head of Insurance for HSBC Bank Middle East Limited in UAE. Armenia’s insurance sector today is not much advanced, compared with banking system. Are you going to use your former experience to develop insurance services within HSBC?  

- Yes, it is definitely something I want to look at. It is an important area for the HSBC Group as well. It will obviously depend on whether the local environment supports it, in terms of legislation and other relevant infrastructure, and I understand there are some developments expected shortly in terms of pension reforms, car insurance becoming mandatory etc.  Demand also needs to be there and sometimes this is a matter of educating people about the importance of insurance, since they often think they don’t need it when in reality they do. We will explore the opportunities, as we aim to provide a comprehensive range of services to meet all customer needs.

- Last year, HSBC Bank Armenia launched telephone banking, internet banking. What else you can offer the customer this year? Maybe there will be some new opportunities or some new services that you can announce?

- We’re going to develop our cards proposition – we are planning to launch debit cards by end of the year and we would also like to introduce chip and pin technology for cards, which will provide more security for our customers. We are going to introduce multifunctional ATMs,  allowing customers to make cash deposits as well as withdrawals. We will continue to invest in our direct channels: ATMs, Telephone banking and Internet banking services.      

- What role does HSBC Bank Armenia play in HBSC Group and what is your vision about its future developments?

- As you know, HSBC is present in eighty six countries, but we don’t want to be in a country just for the sake of being there.   There needs to be a strong business case for each country.   But as a Group we also want to be joined up and I think part of the attraction of Armenia is that, whilst there is a population of 3 million in the country, there are 8 million Armenians outside, and in almost all of the countries where they live, we have HSBC presence.  This is where we should be able to really add value.  The same applies for companies with international needs. So, as I mentioned before, this will be an area of focus for us going forward.

Having a global presence also benefits our staff as well as our customers.  At the moment 8 of our Armenian staff are working overseas, gaining valuable international experience and sharing best practice around the HSBC Group.  HSBC Bank Armenia also provides HR and IT support for regional offices, which is a reflection of the skills and expertise we have in this country.