ARARATBANK ISSUES SHARES FOR FIRST TIME

Noyan Tapan
Dec 18 2007

YEREVAN, DECEMBER 18, NOYAN TAPAN. 5 Armenian companies issued bonds
this year, with Araratbank being the first one to initiate a public
offer of shares, the deputy chairman of the Central Bank of Armenia
(CBA) Artur Javadian said at the December 18 press conference.

The director of Araratbank’s dealing center Davit Harutyunian stated
that the bank on December 17 started to place ordinary nominal shares
of the total amount of 381.5 million drams (about 1.25 mln USD) through
a direct public sale, which will end on January 21, 2008. The nominal
value of a share is 5,000 drams, the placement price is 5,900 drams
which is lower than the accounting price. The number of shares will
make 70 thousand, and if the demand is lower, the placement will be
considered as invalid. According to D. Harutyunian, studies showed
that demand will exceed supply and will be greater than the maximum
number of shares – 76,300. After placement of this quanity of shares,
the subscription will end. The subscription advantage will be given
to those to submit bids earlier.

According to plans of Araratbank, it was envisaged that the bank’s
assets will make 21 billion drams in late 2007 and this index
has already been exceeded. It is forecast that in late 2008, the
bank’s assets will make 45 billion drams, while in late 2009 –
65 billion drams. It is forecast that in late 2007, the overall
capital of Araratbank will make 5 bln 50 mln drams, in late 2008 –
6.6 bln drams, and in late 2009 – 8.6 bln drams. The bank’s profit is
forecast to make 307 mln drams in 2007, 672 mln drams in 2008, and 922
mln drams in 2009. It is forecast that the average price of a share
of Araratbank will make 6,571 drams in 2008 and 6,980 drams in 2009.

In the words of A. Javadian, Araratbank has its proper place
in Armenia’s financial system. It is a participant in several
international programs being implemented in Armenia. According to him,
Araratbank’s assets grew by 170%, liabilities – by 345%, capital –
by 20%, deposits – by 360% and crediting of the economy – by 70%
in 11 months of 2007 on the same period of 2006.

The executive director of Araratbank Ashot Osipian said that in 2008
the bank envisages another three issues of shares and a regular
issue of bonds (in March). In his words, the fact that in 2006
Swedish-Finnish OMX AB company started negotiations on purchase
of the Armenian Stock Exchange has given a positive impulse to the
issue of securities by the bank. The above mentioned deal has already
been concluded, and, according to A. Osipian, those to place their
shares on the Armenian Stock Exchange will receive the opportunity
to place them in the countries where OMX AB operates. It was stated
that Araratbank’s shares will be listed on the Armenian Stock Exchange.

A. Osipian added that the mortgage credits of Araratbank currently
amount to 1.35 billion drams and will make 1.6 billion drams at the
end of the year.

The amount of credit investments makes 7.7 bln drams and will reach
8.5 bln drams at the end of the year.

D. Harutyunian reminded that the international rating company Global
Rating Group assigned Araratbank "B-, forecast – stable" rating
in May 2007, which in September was replaced with "B+, forecast –
stable" rating.