GLOBAL FINANCIAL CRISIS RESTRAINS CREATION OF ALL-ARMENIAN BANK
ArmInfo
2009-05-27 10:01:00
The global financial crisis restrains the process of creation of a
global Armenian retail bank (All-Armenian Bank – editor), Armenia’s
minister of economy, Nerses Yeritsyan, tells bne business issue. The
government contributed $20m to the capital of the bank, which has
already been set up, but isn’t operational yet. The plan was to raise
another $80m from Armenians around the world. 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these commitments have been withdrawn for the moment while everyone is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", Yeristyan stressed.
"It is a global retail bank that will target Armenians living
overseas," he says. "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." Creation of All-Armenian Bank will allow mobilising resources
and investing into targeted projects back in Armenia. "It is a way
for our diaspora to take a more active role in the development of
the country and at the same time earn a good return on that growth,"
says the minister.
As the author of the publication says, the inflow of remittances
is already worth billions of dollars a year, but this is only the
tip of the asset iceberg and a fraction of the personal wealth of
successful Armenians who live overseas, most of which is deposited in
local banks. The author comes to the conclusion that Armenia’s best
export is its people and the government is hoping to tap its wealthy
diaspora by setting up a global retail bank that can funnel some of
their money into projects back at home.
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.