HSBC Bank Armenia To Join "Arca" Processing System This Year

HSBC BANK ARMENIA TO JOIN "ARCA" PROCESSING SYSTEM THIS YEAR

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. HSBC Bank Armenia will join the Armenian
Card (ArCA) processing system by the 4th quarter of 2008, which will
create an opportunity to receive money from cash machines of HSBC Bank
Armenia by using ArCa plastic cards of other banks – at the rates of
ArCa system’s participant banks. ArCa cards are currently serviced
by the cash machines of HSBC Bank Armenia but at the higher rates of
HSBC Holding international bank group. The CEO of HSBC Bank Armenia
Tim Slater said this at the May 20 press conference.

According to him, the bank now considers the possibility of installing
cash-in machines.

Speaking about crediting programs of HSBC Bank Armenia, T. Slater
said that the total amount of crediting by the bank will make about
270 mln USD in late 2008, including mortgage credits of 80 mln USD
(55 mln USD in late 2007) and car credits of about 16 mln USD (13.5
mln USD in late 2007).

In the words of T. Slater, a growth in interest rates has been
observed now in the Armenian market of banking services, there is
great demand for credits. On the other hand, the growth in interest
rates of deposits has slowed down, while the refinancing interest
rate of the Central Bank of Armenia (CBA) has increased from 4%
to 6.75% in recent years. He said that under such conditions, many
banks have suspended provision of mortgage credits, whereas HSBC Bank
Armenia continues to provide this service: mortgage crediting is done
at 11% interest rate (in drams) and 14% interest rate (in dollars)
for a period of 15 years. The possibility of increasing the repayment
period to 20 years is now being considered.

It was stated that the bank together with the European Bank for
Reconstruction and Development (EBRD) and the International Finance
Corporation (IFC) is discussing the possibility of providing joint
(syndicate) commercial credits in Armenia.

T. Slater said that this year the bank’s indices are also in line
with the programmed ones: in January-April 2008, its after-tax profit
made 3.8 mln USD, growing by 27% as compared with the same period of
last year.

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