The interview of IDBank Deputy Chairman of the Board, Financial Director Ruben Melikyan to Banks.am

Mr. Melikyan, the summary of financial indicators gives grounds to talk about the bank’s achievements. To what extent has IDBank implemented the planned programs and what are the results of the quarter?

Before talking about financial indicators, let me first note that 2019 has been a year of progress and news for IDBank, and what we have done in the first quarter is only the basis for the development of the second one.

As for financial indicators, net profit of about AMD 1.53 billion was recorded by the results of the first half of 2019. We have a 14% growth in assets, a 15% growth in our loan portfolio, and a 15% growth in time and demand liabilities. These are not just figures, of course, they speak about the growth of clients’ confidence towards IDBank.

The bank creates an atmosphere by its activity that gives clients confidence and belief in the future that they have chosen the right financial partner. This, in turn, affects the bank’s activity, only in a positive sense, of course.

It should also be noted that the bank, according to the capital adequacy ratio which makes 30% (instead of minimum 12%), occupies leading positions in the banking system and all this speaks about the stability of the bank, which is a priority for investors and depositors.

You have mentioned that the loan portfolio has grown. What is the structure of the portfolio and what credit policy does the bank envisage for the second half of the year?

The credit portfolio, as I mentioned, has increased by 15%, retail lending has increased by 26%, including the mortgage loan portfolio which has increased by about 60% or AMD 3.6 billion reaching AMD 9.5 billion, which is an unprecedented increase. This is the result of the development of competitive loan products by IDBank.

IDBank provides mortgage loans with up to 20 years of maturity, allowing you to purchase an apartment even without a down payment. Our offers are one of the most competitive in the market, which ensures customer flow. By the way, we recorded an increase in the number of clients was by 11% as well in the first half of 2019.

Particular activity of clients was noticed especially as a result of the introduction of interesting new card products by the bank. In particular, IDBank offers card types that allow you to save money on the one hand and spend it effectively on the other hand, and our cards provide cashback on non-cash transactions, positive balance revenues and other privileges.

We work on the convenience and affordability of products to offer loans that best meet customer requirements.

IDBank was one of the few banks that extended the process of forgiving fines and penalties on bad loans. What criteria did the bank use to reach reconciliation with clients, what results have been registered?

This decision of the government is commendable and has had a very positive impact on the banking system. From July 2018 to the 31 July 2019, a total of 1212 reconciliation agreements were concluded, and 194 loans were fully repaid as a result of forgiving fines.

This means that 1212 borrowers got a new opportunity to maintain their loans creating a new credit history.

As a result of these transactions, the bank has already forgiven fines of more than AMD 1.5 billion. I can also mention happily, that the majority of borrowers have become very conscientious, they have been making payments without delay since the penalties were forgiven. This testifies that we have made the right decision by prolonging the process of forgiving fines and penalties on bad loans. We are sure that easing citizens’ credit burden will only have a positive effect on both clients and the banking system; besides the fact that a social problem is being solved, the relationship between banks and clients is being restored, trust towards the banking system is being recovered.

Realizing this, as it was in the past, now also, the bank operates a policy of reasonable concession to customers with solvency problems.

You talked about solving social problems. What corporate social responsibility programs are being implemented by IDBank?

The bank attaches great importance to its participation in solving social problems of the country. We, as an organization bearing corporate social responsibility, have taken education as our primary focus. From currently operating programs I can mention the “Scholarship program named after IDBank”, under which 5 students received AMD 1 million to continue their education in Master’s program.

In general, we support students; students with no work experience can participate in the bank’s “Build your career with IDBank” program and then take a two-month training to become an IDBank employee. We already have students working in the bank by the first stage of this program, and the second stage has started.

Together with “World Vision” company we have announced the “Back to School” campaign, which aims to provide children from vulnerable families with necessary clothing and stationery.

IDBank is also involved in health programs: we support various funds that are together with children and families who have found themselves in difficult situation, help them cope with health problems that the average statistical family is unable to solve. The above-mentioned programs are just a part of the bank’s social programs, which will be continuous. We aim to broaden the scope of the projects and the range of their beneficiaries.

Just one year has passed since the rebranding, but let’s not forget that the bank will soon be 30 years old. You have been in charge of finance for 5 years. What financial achievements have you been proud of over these years, and what are your plans for the future?

The bank has been operating under the new brand for only a year, but we have a history of almost 30 years full of diverse events. The bank has also gone through a period of several years of loss. As a result of some effective measures we took, the situation began to settle, and over the last two years the bank recorded impressive profit indicators. This is explained not only by strategic changes but also by teamwork. To say that I am proud of some financial achievements would be a mistake because we work as a team, and as a result, we have improvement and progress of this or that indicator. The bank will not operate as a large body unless it works properly and coherently in each unit. We value each employee’s role in the bank’s success and keep a team spirit.

As for the development vision, as a young bank that has many years of experience in Armenia at the same time (Mr. Melikyan refers to the rebranding – Banks.am), IDBank is full of new ideas, programs, some of which are already in the process of implementation and some will soon be finished and will be introduced to our clients and partners.