Banks.am’s interview with Jan van Bilsen, International Finance Corporation (IFC) Regional Manager for the South Caucasus

- How do you assess the outlook of Armenia’s banking sector amid growing economic vulnerability?

- Countries in the region, including Armenia, are still adjusting to the new economic reality. In times of growing economic vulnerability, we focus on increasing our support to Armenian banks to help them grow and boost confidence in the country’s banking sector. Our recent efforts to support Ameriabank, the largest bank in Armenia, are part of this strategy.

- IFC has a proven track record of cooperation with Ameriabank. While this cooperation is increasingly expanding, does this mean you are satisfied with the results?

- We’ve enjoyed a fruitful partnership with Ameriabank since 2009 in many areas, from direct lending to currency swaps. For example, IFC’s Global Trade Finance Program has helped the bank finance a number of strategically important projects in Armenia. Our partnership also helped finance small hydropower plants, increasing the country’s renewable energy supply.

In 2013, Ameriabank was also an underwriter of IFC’s bond, which was the first placement by a non-resident issuer and the first foreign corporate bond issued in Armenia’s capital markets.

On January 21, 2016, we marked a new step in our partnership with Ameriabank, with a $50 million loan to support its capital and its plans to extend support to local enterprises to help spur economic growth. Our six-year subordinated loan will help the bank continue to grow and prepare for an initial public offering (IPO).

We look forward to continuing to work together to further boost private sector growth in Armenia, and strengthen the country’s banking sector.

- $50 million loan will be invested into the Bank’s capital for on-lending to economy. Into which industries will the funds be channeled?

- The bank, as a lender, is the ultimate decision-maker regarding its borrowers and the industries they operate in. In general, we expect our financing will support the bank’s capacity to lend to local enterprises operating in a wide range of industries, helping to spur economic growth and create more jobs.

- Ameriabank’s assets surpassed USD 1 billion. How critical is the existence of such a major bank for further development of Armenian banking sector and the overall economy? What do you anticipate from a closer cooperation with Ameriabank, i.e. subordinated debt transaction?

- A well-developed banking sector is critical for the development of any economy, so the growth of Ameriabank, which is the country’s largest bank, is an important contributor to the sector’s overall stability.

- How do you assess the current economic environment in the region?

- The global economy is still fragile and this impacts the region, where the environment is extremely challenging. Several countries in the region, including Armenia, are still adjusting to this new economic reality. At times like this, international finance institutions like IFC can play a crucial role in supporting private sector development in Armenia and beyond.

We believe the private sector in Armenia, and sectors like agribusiness and mining in particular, has strong potential. In this fiscal year, IFC plans to invest more than $100 million to support private clients in Armenia, our largest annual program in this country.

- Do you intend to continue supporting development of securities market in Armenia?

- We issued IFC’s Inaugural Armenian dram bond in 2013. By issuing the first “Sevan” bond, which became the largest by-volume corporate bond traded in 2014 in Armenia, we became the first non-resident issuer of local-currency bonds in the country’s domestic capital markets. This is part of a larger IFC program under which, depending on market needs, we plan to issue multiple bonds to strengthen Armenia’s capital markets and boost lending to the private sector.