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On January 21, 2020, Ardshinbank successfully priced its new RegS / 144A US$300m 5-year eurobonds rated Ba3 by Moody’s and B+ by Fitch. This was the first non-sovereign index-eligible issue out of Armenia. The bonds are listed on the Irish Stock Exchange and clear through DTC, Euroclear and Clearstream. Citigroup Global Markets Limited and Renaissance Securities (Cyprus) acted as lead managers for the transaction. The issuance was recognised as a Deal of the Year by The Banker magazine, once again confirming Ardshinbank’s key role in the Armenian investment banking market.


Mr Artak Ananyan, Chairman of the management board, Ardshinbank

What are the main challenges in the Armenian banking industry and how is Ardshinbank overcoming these challenges?

The banking industry is changing rapidly. As a result Ardshinbank is facing more challenges than ever before. Currently, there are three main challenges. First is the constant high competition among banks and the increasing competition from new industry entrants e.g. fintechs, which forces banks to seek partnerships and/or acquisition opportunities. In order to maintain a competitive edge, Ardshinbank is seeking partnerships with fintechs, and is investing in digitalisation and the simplification of its customer experience.

The second challenge is changing business models. Competition and regulatory compliance are putting pressure on traditional sources of profitability for banks. Ardshinbank is creating new competitive service offerings, optimising business lines, and looking for sustainable improvements in operational efficiencies to maintain profitability.

Thirdly, the challenges of customer retention. Financial services consumers expect personalised experiences. Customer loyalty is becoming an endangered concept. We know that by studying our customers behaviour and expectations we can optimise our product lines, as well as our sales and service channels, which will increase customer satisfaction and wallet share, and therefore guarantee a low customer turnover rate.

Ardshinbank placed Eurobonds in the international capital market at an unprecedented $300 million volume for Armenia, which, in fact, provided an investment for the Armenian economy.

This is a landmark transaction for Armenia, since in the country's private sector there were no previous attempts raising funds and securing foreign investment through a single transaction in such volume. With the issue of Eurobonds, demand approached $500 million. The bonds attracted more than 70 investors: 45% of the investors are from Switzerland, USA (30%), Germany, Great Britain and other countries. This proves once again that the level of the bank’s transparency, risk profile and strategy are acceptable to international investors and comply with international standards.

Armenia issued Eurobonds some time ago, then Ardshinbank made its placement. Will this allow the use of new tools to attract financing, in particular for the private sector in your country?

Definitely. Investors are looking for new markets, therefore, as soon as sovereign bonds were issued by Armenia, we considered it timely and worthwhile to act as the next private player after the sovereign. And as you see, we did not fail. I want to emphasise that Ardshinbank issued its bonds without the guarantee of the Armenian government. Meetings with investors took place in Zurich, Munich, London, New York and Boston, after which bonds were issued. Ardshinbank has ratings from two of the largest international rating agencies Moody's and Fitch. The same rating as the Republic of Armenia and this is important for investors.

An interesting fact: when we first entered the international debt securities markets, this not only helped us attract funding but also enhanced our reputation among Western investors. They became interested in the bank; the number of requests for analytical information on our bank sharply increased among international agencies Moody's and Fitch. All this subsequently played a positive role and led to the results that we have today.

The Coronavirus pandemic continues to shut down cities around the world and many businesses and organisations from various sectors of the global economy have seen significant disruption. How is Ardshinbank helping its customers that have been impacted?

Long before the pandemic and the economic crisis, Ardshinbank managed to attract a significant amount of cheap and long-term resources for the Armenian financial market by placing its bonds in the European financial market.

At present, the bank has competitive advantages and favourable liquidity, which allow it to implement a targeted policy of assistance to its borrowers. The bank is looking for new mechanisms to rescue our customers from insolvency, e.g. loans repayment terms and conditions review. Consumer loan and mortgage borrowers are the focus of attention. We are planning to finance new and promising projects alongside the existing businesses and help them overcome the crisis with minimum losses. We are sure that the issues will be solved and the country will come out of the crisis with renewed vigour and growth potential.


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