YEREVAN, December 10. /ARKA/. Inecobank has bought 100% of ProCredit Bank, a subsidiary of ProCredit Holding AG & Co. KGa A.
The deal is financed from capital investments of the European bank for Reconstruction and Development (EBRD), replenishment of Inecobank two large shareholders’ capital and the $20 million attracted from the International Finance Corporation.
The EBRD makes capital investment amounting to AMD 9.8 billion by purchasing 22.7% shares of Inecobank.
Taron Ganjalyan, the executive director of Inecobank, said the bank is one of top profit gainers among Armenian banks throughout one decade. It is also building up its share at the market thanks to growth in small and mid-scale businesses.
«For this purpose we entered into negotiations with ProCredit Holding in the first quarter of this year and reached preliminary arrangement on acquisition of 100% of ProCredit Bank’s shares,» he said.
In his words, ProCredit Bank’s core corporate culture and values fully coincide with Inecobank’s standards and values. The two banks’ purposed clients are identical as well.
«Taking into account ProCredit Bank’s share at SME market – 9.5% and the leading position of Inecobank, it can be said for sure that as a result of this deal, the merger bank will become one of the flagship banks in SME area,» Ganjalyan said.
In his words, the bank will be sixth for its assets. It will serve more than 10,000 corporate clients and 200,000 individuals.
«This step will allow us to attract resources from international markets at lower interest rates and, as a result, to ensure available loans to our SME clients,» he said. «We will be able to invest plenty into IT segments, and this will make it possible to provide more professional and higher-quality services to our partners.»
Ganjalyan thanked international partners for support in effecting this deal.
He said all contracts with the current clients of ProCredit Bank remain valid, and Inecobank assumes all contractual obligations.
«The deal will be formalized in accordance with the central bank’s procedures within 10 to15 days,» he said.
Avtandil Gogoli, executive director of ProCredit Bank, on his side, said that the bank’s managers have decided to be with one of the strongest banks working with small and mid-scale businesses.
In his words, this deal will create excellent opportunities for the bank’s staff and clients.
ProCredit Bank received its license from the Central Bank of Armenia on December 7, 2007. The bank’s assets totaled AMD 56.9 billion in late September 2015 (16.75% decline since the beginning of the year) and liabilities AMD 47.7 billion (16.75% decline).
Its capital amounted to AMD 9.2 billion (0.81% growth) and its loan portfolio AMD 44 billion (15.7% decline). The bank earned AMD 88.2 million in profits in Jan-Sept 2015 against AMD 330 million in the same period a year before.
Inecobank CJSC was registered on February 7, 1996. This was the first bank in Armenia to present the first installment lending program.
Before the EBRD bought 22.7%, the bank’s shares belonged to Baloyan A. (35.23%), Safaryan K. (30.34%), DEG Deutsche Investitions-und Entwicklungsgesellschaft mbH (12.58%) and the International Finance Corporation (9.32%). Upon completion of the deal the two key shareholders will have a little more than 50%.
Inecobanks’ assets totaled AMD 158.1 billion in Jan-Sept 2015 (1% decline since the beginning of the year) and liabilities AMD 129 billion (3.5% decline). Its capital amounted to AMD 29 billion (11.3% growth) and loan portfolio 101 billion (6.5% decline).
The bank earned AMD 3.3 billion in profits in Jan-Sept 2015 – 4.4% year-on-year decline. ($1- AMD 484. 79). —0—-
