DILIJAN – A FINANCIAL CENTER?
By Ara Martirosian
AZG Armenian Daily
27/06/2007
Serge Sarkisian’s suggestion for changing Armenia into a regional
financial center
The Chairman of the Union of Armenian Banks Stephan Gishian summarized
the results of 2006 in the annual meeting of the union on June 25.
According to Gishian an intense competition was recorded among the
21 banks of Armenia in 2006. Thanks to it the service level rose and
the services were developed.
In 2006 all the banks had profits – 17.1 billion drams in total. The
banks’ assets increased by 20% – 544 billion drams, the deposits
exceeded 150 billion drams.
Stephan Gishian was sure that this year the results would be better,
but he mentioned that there were also many things to do.
The deposits are only 5% of GDP in Armenia, while in European countries
it is 50%. The banking level is very low in the regions.
The Chairman of the Union of Armenian Banks called all the bankers
to put more efforts in order to direct money turnover to the banks
and to reduce the shadow.
The Prime Minister Serge Sarkisian in his speech assured that Armenian
banking system is involved in the world financial processes. He also
mentioned that the role of banking system in the development of the
economy is unsatisfactory, that’s why the specific weight of the
loans in GDP does not exceed 10%.
The Prime Minister also spoke about the projects that the Government
would realize together with the Central Bank and Union of Armenian
Banks.
The first proposal is to change Armenia into a regional financial
center. Taking into account not-proportional development of the
Armenian regions and that most of the people who live out of the
capital are deprived of making use of the banking system, the Prime
Minister proposed choosing a medium or a little town in Armenia and
changing it into a financial center. "For example, Dilijan or another
town. It will also contribute to the development of the whole region",
he said.
The Chairman of the Armenian Central Bank Tigran Torosian responded
to the proposal of the Prime Minister and said that the Central Bank
and the Union of Armenian Banks would discuss what investments and
how long it would take to change one of the Armenian towns into a
financial center.
The Chairman of the Central Bank mentioned that the annual 20-30%
development of the banking system was not enough for the aim of
increasing the role of the banks in the development of the economy. It
might be at least 40%.
He also attached importance to the growth of the involvement of natural
and juridical persons in the banking system. The bank clients’ number
increased only by 8.5% (60.000 people) and was 763.000: 723.000 –
natural persons and about 40.000 – juridical persons.
The next issue is the strengthening of the competition of banking
system. 5 foreign banks will start their business in the Armenian
banking system soon: "Armpostbank" with Dutch capital, Russian
"Gasprombank", Lebanese "Byblos" bank, Austrian "Rayfazen" and German
"Procredit" banks.
Tigran Torosian attached importance to the development of hypothec
market and mentioned that in the next 5 years it is planned to increase
the volumes of crediting to 350 billion drams instead of present 30
billion drams.
Not-compatible companies leave the insurance sphere.
In the security market the Swiss OMX will get the Armenian Stock
Exchange and Central Depositary and will start the development of
this sphere.
The Chairman of the Central Bank also promised to create 600 billion
drams savings 5 years later in virtue of the reforms in the pension
system.