AMRATING AGENCY ENHANCED CREDIT RATING TO ARARATBANK FROM ‘B-‘ TO ‘B+’, OUTLOOK ‘STABLE’

ArmInfo
2007-09-17 21:47:00

The AmRating Rating Agency enhanced the credit rating to ARARATBANK
from ‘B-‘ to ‘B+’, "stable" outlook. As the bank’s press-service
reports, the rating is substantiated by high development rates, maximum
transparency, strong support by a financially independent owner,
the available political resources, positive development dynamics,
availability of a good potential for further development.

The factors which clampdown the rating are as follows: insufficient
diversification of liabilities, quick growth of the retail credit
portfolio, characterized by increased risks, high level of competition.

Enhancement of the bank’s rating is conditioned by growth of assets
under retention of capitalization at high level, development of the
retail business, improvement of the level of diversification of the
credit portfolio and liabilities, retention of positive assessments in
the bank’s corporate management. In May, 2007, the ARARATBANK issued
and successfully placed non-documentary corporate coupon bonds with
the emission volume of 250 mln drams which are actively quoted in the
Armenian Stock Exchange ArmEx. Due to the active work in the market
of government bonds, the bank was conferred the status of RA Finance
and Economy Ministry’s agent in June, 2007. In the tideway of the
credit policy extension, the bank standardized granting of autocredits
under its own steam. It also developed credit special programmes with
discounts for corporate clients, as well as new interrelated deposit
and card products.

Executive Director of AmRating Emmanuil Lazarian thinks that rating
enhancement by two points at once indicates the bank’s serious
steps towards improvement of its key indicators and increase of the
investment attractiveness by entry the market with a bonded debt and
decision on reorganization to an Open Joint Stock Company. In this
context, the AmRating’s Director says, the ARARATBANK’s cooperation
with rating agencies becomes one of the important components of
the business development. Chairman of the ARARATBANK’s Board of
Directors Ashot Osipyan thinks it is important to enhance the rating
since it increases the trust towards the bank not only by clients
and partners but the structures which cooperate with the bank. The
"stable" rating forecast is an evidence of further improvement of
the bank’s indicators, successful implementation of technologies,
extension of the spectrum of services and, as a result, the growing
reliance on our development policy, A.

Osipyan said. To note, the ARARATBANK is a small, private, developing
bank of Armenia, which is controlled by one of the biggest oil traders
of the country, the "Flesh" Company, by 100%. The main direction of
activity at present is service of big and middle corporate clients.

The bank also develops the retail business. The bank’s strategy
envisages its entry into the leading positions in Armenia in the sphere
of retail services and crediting of economy’s real sector. The bank
takes part in the international credit programmes. The bank possessed 4
branches as of the end of June, 2007, one of which, the Western Union,
is the only specialized branch in the country. Two capital and four
regional offices will be added to the acting branches in Yerevan and
Nagorno Karabakh till the end, 2007.

The AmRating is an independent Rating Agency of the Republic of Armenia
being part of the GlobalRating group, which also includes the RusRating
Agency (Russia) and KzRatingAgency (Kazakhstan). The AmRating Agency
launched its work in December, 2006. The Agency’s main services include
conferral of a rating to the banks and study of the banking sector.