Consequent to the sale of the Georgian subsidiary bank, Cascade Bank
targeted the surplus liquidity at the development of loan products and
establishment of the branch network.

2007-12-27 17:54:00

ArmInfo. Cascade Bank will use the surplus liquidity generated after
the sale of the Georgian subsidiary bank for the creation of branch
network and the development of loan products. That statement was made
by Jonathan Stark, the CEO of Cascade Capital Holdings, during the
interview with the correspondent of ArmInfo.

Mr. Stark told that the proceeds from the sale of Cascade Bank Georgia
increased the liquidity ratio of the Bank, which made more than thrice
the general normative ratio, and twice the current ratio.
"We made a decision to intensify our credit policy significantly
through the development of a new choice of loan products that are
correlated with the wide range of financial services offered not only
by the Bank, but also by all members of Cascade Capital Holdings," Mr.
Stark stated. According to him, the Bank makes every effort to train
highly qualified personnel, and on the other hand, already has the
capacity to offer quality services to both corporate and retail
clients. To provide the extensive development of retail banking, and as
well sound SME lending projects, the Bank though lacking any
branches currently, is planning to open a number of branches next year.
"We reconsidered the lending policies and procedures to make our loans
more accessible and attractive, and to construct the whole product line
so that the client needs are met to the utmost," Mr. Stark underscored.
The Bank is also planning to access the highly profitable market of
remittances, and is currently considering various proposals from the
perspective of expediency and efficiency of development of the
particular segment. According to Jonathan Stark, the Bank targets its
new micro- lending products at the specific groups of society, and as
well applies innovations and the latest achievements practiced in the
international banking community, such as on- line crediting, SMS
banking, etc.

Furthermore, while speaking about the financial indicators of Cascade
Bank, Jonathan Stark stated that during the year the assets of the Bank
grew from AMD 9 bln to 12 bln, the growth of the deposit base comprised
more than 90%, a similar growth was also recorded by the indicator of
credits to economy. The intense monthly dynamics demonstrated the
operational income of the Bank. During 11 months of the current year
the operational income of the Bank constituted AMD 210 mln. However,
Mr. Stark explained that the balance of the Bank for the reporting
third quarter regrettably disclosed "technical" loss related to the
sale of the Georgian subsidiary bank. According to the Armenian
Accounting Standards, which allows recording by equity method, the
revaluated initial investments in the Georgian subsidiary bank and the
investment income generated in Georgia turned out to be larger than the
sale value of the Bank, as a result whereof the "technical" loss of AMD
411 mln was recorded. However, that amount would be less than AMD 100
mln by year-end results. Nonetheless, the sale of the Georgian bank was
profitable since the initial investments had been made in US dollar and
the banking operations were executed in the local currency (given the
declining exchange rate of USD/GEL).