Interview of the Chairman of “Armenian Development Bank” Board of Directors Karen Sargsian to Mediamax Agency and Banks.am portal 

- “Armenian Development Bank” always stood out by a reserved marketing policy. However, since February 1, you made quite an ambitious offer on free of charge maintenance of bank accounts and plastic cards for a particular category of customers. Does this mean that the bank is making a transition to a new more resolute policy?

- Indeed, during 20 years of activity, “Armenian Development Bank” carried out quite a modest marketing policy, which, however, did not become an obstacle for the bank to occupy a deserved place in the banking system of the country all these years.

However, in the beginning of this year we set for ourselves more ambitious tasks, and in order to realize those tasks we attach great importance to implementation of definite marketing steps. In particular, here we speak of free of charge provision of 14 banking services, among which are realization of international and local transfers, cashing operations, provision and maintenance of plastic cards, the internet-bank system, etc.

I would call this a transition to a new marketing policy, or to be more exact, to a policy of growth, which aims at strengthening the bank.

- Who is your new offer addressed to?

- As a rule, in the market of banking services, the most privileged conditions of service are usually provided to big customers. However, our offer differs by the fact that it is aimed at customers, who have a circulation of a medium or lower than medium volume, at those, whose remainder on the account can make up to AMD 1mln.

Any customer, who has an average remainder on their account in the bank, which will be equivalent to AMD 1mln, or a deposit, which will be equivalent to AMD 10mln, can realize the above-mentioned operations free of charge.

I should also note that quite high interest rates - 5% for AMD and 3% for currency accounts, have been established for our customers’ on-demand accounts. I believe that this is a good tool for representatives of small and medium business for managing temporarily free means. 

As you can see, the new offer includes almost the entire range of banking services and provides favorable conditions for small and medium enterprises, which strive to significantly reduce their banking expenditures. From now on, all potential, as well as current customers of the bank, who meet the above-mentioned criteria, will be serviced free of charge.

At the same time, this does not mean that we are not open for representatives of big business: they have always been traditional customers of our bank and there are the same privileged conditions for them.

- The legal status of your bank provides for making collegial decisions. At the same time, the shareholders of the bank are three people with significant participation, and among them is the famous entrepreneur Ruben Hayrapetyan. How does that circumstance influence on making strategic decisions. 

- Of course, the presence of such a shareholder is a great honor for us, however one should take into account the fact that “Armenian Development Bank” is the first in the history of Armenia’s independence and as of today it is one of the few banks, which, as to its organizational and legal status, is an open stock company. At that, the culture of corporate management has many years’ history here and strong bases.

Moreover, the regulations of the bank limit the opportunity of one person owning shares at the volume of 20% or more. Concerning the strategic decisions, they are made in accordance with the corporate principles of an OJSC: by the general assembly or the bank’s Board.  

The composition of the shareholders is an evidence of what has been said: today the bank has 75 shareholders, both individuals and legal entities, among them residents and non-residents.

We enjoy confidence not only in Armenia, but also in many foreign countries. The bank has investors from the USA, Germany, Italy, France, Spain, Australia, Russia, Canada, Sweden and even Brazil. I should note that all those entities or individuals purchased shares by means of a free trade on the Armenian Stock Exchange, where our shares are traded periodically.

I believe that it is difficult to find a stock company with such a composition today in Armenia. Such transparency means that we are open for all.

- Do you plan to stir up work with international financial organizations?

- Yes, and this is a most important task for us. Today we already carry out negotiations with international financial structures, focusing attention on loan programs for small and medium enterprise development.

- Have there changes taken place in credit offers?

- We have elaborated a number of terms for our customers, among which I would single out the prolongation of credit repayment terms. Thus, for business customers there is a term of 7 years established, and the maximum repayment term for consumer credits makes 5 years, and this is an advantage over the offers, existing in the market today.

For individuals we have implemented “Instant” consumer credit, within the framework of which the decision on issuing a credit will be made within 1 day, and the credit itself will become available in the course of a few days.

- In a competitive struggle, banks started paying more attention to retail services. Don’t you yield as to this segment, first of all, in terms of an underdeveloped branch network?

- This year we intend to realize a number of programs, take the quality of customer service to a new level and make the bank’s services more available in the regions of Armenia due to opening new comfortable branches.

Since January, 2011, the bank is already represented in Vanadzor. We also plan opening branches in Gyumri, Armavir, as well as the third branch in Yerevan.

But we do not set a task to form a branched office network, since we believe that modern technologies can make any customer closer to the bank. The matter, of course, is the internet-bank service. 

- How would you describe the year of 2010 for the bank and what are the plans for this year?

- Despite the fact that the year of 2010 is called a post-crisis year, when, as a rule, one needs to revive after the crisis shocks, nevertheless, it was the best in the history of the bank’s activity, at that both in terms of the size of assets and the capital and in terms of profit.

Occupying a modest position in the banking system of the country as to our size, we managed to secure significant profit, which, after taxation, made about AMD 730mln. As to relative indices we also managed to occupy high positions, in particular, the ones of return on assets (ROA) made 3.21%. As to this index we occupied the seventh line in the banking system. Return on equity (ROE) made 10.29%. As to this index we occupied the ninth place.

Concerning the plans for this year, taking into account the transition to the policy of growth, we will try to make our services become affordable for wider layers of the population, at that both as to the composition of its customer base and as to their number.