AGREEMENT SIGNED ON PROVISION OF 10 MILLION DOLLAR CREDIT BY EBRD TO CONVERSE BANK

Noyan Tapan

Nov 25, 2008

YEREVAN, NOVEMBER 25, NOYAN TAPAN. An agreement on provision of a
10 million dollar credit to Converse Bank by the European Bank for
Reconstruction and Development (EBRD) was signed on November 25. The
agreement was signed by the Head of the EBRD Armenia Office Michael
Weinstein and the CEO of Converse Bank Ararat Ghukasian. Under
the agreement, the credit will be provided to Converse Bank in
two tranches, at market interest rates and for a three-year period
and will be spent on development of small and medium enterprises,
regardless of the Armenian region where the given enterprise is
located. Converse Bank will receive the first tranche in January 2009.

The Chairman of the Central Bank of Armenia (CBA) Arthur Javadian was
present at the signing ceremony. In his words, the Armenian banks
currently do not have any liquidity problems, and foreign credits
enable to protect the Armenian banks from the possible impact of the
global financial crisis.

According to A. Ghukasian, under the indicated credit program of EBRD,
Converse Bank will provide credits for a 4-year period, at an interest
rate of about 16% – depending on risks related to the borrower.

The CBA chairman said that the rumors that Armenian banks do not give
credits are not true. According to him, the total amount of crediting
grew by 50% this year as compared with last year. A. Ghukasian added
that Converse Bank will continue crediting with its own money, but
the attraction of external resources for this purpose will help meet
the developing economy’s growing demand for credits.

A. Javadian announced that the provision of consumer credits has been
reduced a bit because this type of crediting contains more risks as
compared with crediting of enterprises. Besides, new risks emerged
which makes banks more careful when choosing borrowers.

To recap, Converse Bank CJSC was founded in 1993. Its current
shareholders are Advanced Global Investments CJSC (95%), whose main
shareholder is Argentinean-Armenian businessman Eduardo Eurnekian,
and the Armenian Apostolic Church (5%). The bank has 25 branches in 13
Armenian cities and employs 500 people. As of October 31, 2008, the
bank’s overall capital amounted to 13 billion drams (more than 42.6
mln USD), its assets made 63.9 bln drams, liabilities – 50.9 bln drams.