IFC Makes First Investment in Armenian Bank
In Washington:
Irina Likhachova
Phone: (202) 473-1813
Email: ilikhachova@ifc.org
IFC Makes First Investment in Armenian Bank
Armenia, Yerevan, July 30, 2004—Today, the International Finance Corporation
(IFC), the private sector arm of the World Bank group, provided a $2.0
million senior loan to Armeconombank to broaden the Bank’s funding base
for on-lending to SMEs and for financing residential housing projects.
By providing financing to Armeconombank (AEB), IFC will enable the Bank
to expand its lending operations and provide commercial financing to businesses
in a variety of sectors, therefore fostering economic growth. In
addition, as the first IFC investment in Armenian commercial banking sector,
the project will have an important demonstration effect for other potential
investors.
At the signing ceremony Mr. Edward Nassim, Director of the IFC’s Central
and Eastern Europe Department, commented: "We are very pleased to
start our investments in the Armenian banking sector with such a reliable
partner as Armeconombank. Our loan, apart from the commercial financing,
will allow the bank to substantially expand its mortgages financing program,
which will play an important role in raising living standards of Armenian
citizens.”
Mr. Saribek Sukiasyan, Chairman of the Board of Armeconombank, commented,
“I am proud today to see the International Finance Corporation as a lending
partner to Armeconombank. Diversification of funding sources for
our bank was a priority in our strategy. I hope that we will continue to
deepen our cooperation with IFC in future.”
Mr. Ashot Osipyan, Chief Executive Officer of Armeconombank said, “By
signing this loan agreement we will be able to offer to our corporate clients
financial resources with longer maturities and substantially increase our
outstanding portfolio in mortgages to individual clients. Dedicated and
effective work of the teams engaged in negotiations, enabled us to reach
to this agreement in a short period of time.”
Armeconombank (AEB) is one of the largest, privately controlled banks in
Armenia. It is the 4th largest bank in Armenia in terms of assets,
with 24 branches across the country and 450 employees. Today the Bank focuses
on serving SMEs, retail clients, and financial institutions. AEB
had the net worth of approximately $5.3 million and total assets of approximately
$33.4 million equivalent as of the end of 2003.
The mission of IFC, part of the World Bank Group, is to promote sustainable
private sector investment in developing countries as a way to reduce poverty
and improve people’s lives. IFC finances private sector investments
in emerging markets, mobilizes capital in the international financial markets,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to governments and businesses. From its
founding in 1956 through FY03, IFC has committed more than $37 billion
of its own funds and arranged $22 billion in syndications for 2,990 companies
in 140 developing countries. IFC's worldwide committed portfolio as of
FY03 was $16.8 billion for its own account and $6.6 billion held for participants
in loan syndications.
Armenia became an IFC member in 1995. The Corporation began investing in
the country in 2000. As of July 2004, IFC has invested $9,09 million in
3 projects including the loan to Armeconombank. IFC continues to explore
the investment opportunities in partnership with strategic investors in
both the financial and real sectors of the country. In addition to the
investment program, IFC has been providing advisory services on corporate
governance, improvement of the investment climate and small and medium
enterprise development.
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