ARMENIAN GLOBAL BANK SEEKS TO TAP RESOURCES OF DIASPORA
2009/0 5/26 | 09:54
Finances
An article entitled "Banking on Armenia’s diaspora" appears in
the May 26 issue "businessnewseurope" focusing on plans by the RoA
government to set up a global retail bank aimed to tap the wealthy
Armenian diaspora.
The Armenian government has already contributed $20 million to
the capital of the bank, which has already been set up but not yet
operational. The plan was to raise another $80m from Armenians around
the world.
The article notes that with three times more Armenians living ouutside
the country than in it, remittances make up the single biggest hard
currency earner for the country.
The government wants to capitalise on this and instead of waiting for
the money to be sent home, it will go out and get it by setting up a
bank with branches all over the world. "It is a global retail bank that
will target Armenians living overseas," Armenia’s minister of economy,
Nerses Yeritsyan, tells bne during May’s annual meeting of the European
Bank for Reconstruction and Development in London. "Imagine if only
1% of all Armenians take a credit card from the new bank, then that
will generate enough money for us to say goodbye to [international
financial institution] funding forever."
However, the crisis threw a wrench into the plans, as most of the
commitments – which came from both large Armenian-owned businesses
and private individuals – have been put on hold after markets
crashed around the world at the end of last year. "We took the
bank on a road show last year and found there was a lot of support
amongst the diaspora," says Yeritsyan. "However, these commitments
have been withdrawn for the moment while everyone is assessing their
position. But we are confident that they will return and we can push
ahead as planned with the bank."
In the meantime, the government has hired head hunters to find a top
quality international CEO, as the tricky bit of making a global retail
bank work is that it will have to compete with high street banks in
the US and UK in terms of the quality of its service. It won’t be easy,
but Yeritsyan is literally banking on the loyalty that Armenians feel
towards their homeland to give the bank a competitive edge.