Banks.am's interview with International Finance Corporation (IFC) South Caucasus Director Jan Van Bilsen
How do you assess the prospects of Armenia's banking sector in the face of increasing economic vulnerability?
The countries of the region, including Armenia, are still adjusting to the new economic reality. In the conditions of increasing economic vulnerability, we attach importance to increasing the assistance provided to Armenian banks, with the aim of helping them to strengthen and increase confidence in the country's banking sector. Our recent efforts to support Ameriabank, the largest bank in Armenia, are part of this strategy.
IFC has a fruitful experience of cooperation with Ameriabank, which is gradually expanding. Does this mean you are satisfied with the results?
- Since 2009, we have been effectively cooperating with Ameriabank in various fields, from direct lending to currency swaps. For example, IFC's Global Trade Finance Program has helped the bank finance a number of important strategic projects in Armenia. Our partnership has also helped finance small hydropower plants, increasing the country's supply of renewable energy.
2013 Ameriabank was also the underwriter of IFC bonds, which was the first placement by a non-resident issuer and the first corporate bond issued by a non-resident in the capital markets of Armenia.
On January 21, we took a new step in our partnership with Ameriabank by providing it with a $50 million loan that will help increase the bank's capital and expand programs to support local businesses, which will stimulate economic growth.
Our six-year subordinated loan will help the bank continue its growth and prepare for an initial public offering (IPO).
We look forward to continuing to work together to further promote the growth of the private sector in Armenia and strengthen the country's banking sector.
IFC's subordinated loan will support Ameriabank's capital for further lending to the economy. Which sectors of the industry will these funds be directed to?
The bank, as a creditor, makes the final decision about its borrowers and the industries in which they operate. Overall, we expect our financing to expand the bank's ability to lend to local businesses across a range of industries, helping to spur economic growth and create new jobs.
Ameriabank's assets exceeded $1 billion. How important is the existence of such a large bank for the further development of the Armenian banking sector and the general economy? What do you expect from a closer cooperation with Ameriabank, i.e. a subordinated debt transaction?
A well-developed banking sector is very important for the development of any economy, so the growth of Ameriabank, which is the largest bank in the country, has an important role for the overall stability of the sector.
How do you assess the current economic situation in the region?
The global economy is still fragile, and this affects the region, where the environment is extremely complex. Several countries in the region, including Armenia, continue to adjust to this new economic reality. In such times, international financial institutions such as the IFC can play an important role in supporting the development of the private sector in Armenia and beyond.
In our opinion, the private sector in Armenia, and such sectors as agribusiness and mining, have strong potential. This fiscal year, IFC plans to invest more than $100 million to support private clients in Armenia, our largest annual program in the country.
Do you intend to continue supporting the development of the stock market in Armenia?
2013 we issued IFC's inaugural bond in Armenian dram. Issuing the first "Sevan" bond, which became the 2014 the largest corporate bond in circulation in Armenia, we became the first non-resident issuer of local currency bonds in the country's domestic capital market. This is part of a larger IFC program in which, depending on market needs, we plan to issue multiple bonds with the aim of strengthening Armenia's capital market and boosting private sector lending.
Source: banks.am