Zawya.com
July 31 2004
IFC Makes First Investment in Armenian Bank
Armenia, Yerevan, July 31, 2004–Today, the International Finance
Corporation (IFC), the private sector arm of the World Bank group,
provided a $2.0 million senior loan to Armeconombank to broaden the
Bank’s funding base for on-lending to SMEs and for financing
residential housing projects.
By providing financing to Armeconombank (AEB), IFC will enable the
Bank to expand its lending operations and provide commercial
financing to businesses in a variety of sectors, therefore fostering
economic growth. In addition, as the first IFC investment in Armenian
commercial banking sector, the project will have an important
demonstration effect for other potential investors.
At the signing ceremony Mr. Edward Nassim, Director of the IFC’s
Central and Eastern Europe Department, commented: “We are very
pleased to start our investments in the Armenian banking sector with
such a reliable partner as Armeconombank. Our loan, apart from the
commercial financing, will allow the bank to substantially expand its
mortgages financing program, which will play an important role in
raising living standards of Armenian citizens.”
Mr. Saribek Sukiasyan, Chairman of the Board of Armeconombank,
commented, “I am proud today to see the International Finance
Corporation as a lending partner to Armeconombank. Diversification of
funding sources for our bank was a priority in our strategy. I hope
that we will continue to deepen our cooperation with IFC in future.”
Mr. Ashot Osipyan, Chief Executive Officer of Armeconombank said, “By
signing this loan agreement we will be able to offer to our corporate
clients financial resources with longer maturities and substantially
increase our outstanding portfolio in mortgages to individual
clients. Dedicated and effective work of the teams engaged in
negotiations, enabled us to reach to this agreement in a short period
of time.”
Armeconombank (AEB) is one of the largest, privately controlled banks
in Armenia. It is the 4th largest bank in Armenia in terms of assets,
with 24 branches across the country and 450 employees. Today the Bank
focuses on serving SMEs, retail clients, and financial institutions.
AEB had the net worth of approximately $5.3 million and total assets
of approximately $33.4 million equivalent as of the end of 2003.
The mission of IFC, part of the World Bank Group, is to promote
sustainable private sector investment in developing countries as a
way to reduce poverty and improve people’s lives. IFC finances
private sector investments in emerging markets, mobilizes capital in
the international financial markets, helps clients improve social and
environmental sustainability, and provides technical assistance and
advice to governments and businesses. From its founding in 1956
through FY03, IFC has committed more than $37 billion of its own
funds and arranged $22 billion in syndications for 2,990 companies in
140 developing countries. IFC’s worldwide committed portfolio as of
FY03 was $16.8 billion for its own account and $6.6 billion held for
participants in loan syndications.
Armenia became an IFC member in 1995. The Corporation began investing
in the country in 2000. As of July 2004, IFC has invested $9,09
million in 3 projects including the loan to Armeconombank. IFC
continues to explore the investment opportunities in partnership with
strategic investors in both the financial and real sectors of the
country. In addition to the investment program, IFC has been
providing advisory services on corporate governance, improvement of
the investment climate and small and medium enterprise development.
-Ends-
In Washington:
Irina Likhachova
Phone: (202) 473-1813
Email: [email protected]