‘Mysterious’ deal in Armenian banking sector or how Central Bank became shareholder of commercial bank

YEREVAN, February 21. /ARKA/. In a Facebook comment on a recent change of shareholders in Armbusinessbank, Armenia’s former minister of labor and social affairs Maneh Tandilyan describes it as a ‘mysterious deal.

According to Tandilyan, one of the new owners of Armbusinessbank, which was in quite a bad financial state according to its financial statements, is a Swiss company that owns now 75% of the bank’s stake, while the other  25% are owned by the Housing for Young Families state-owned refinancing credit organization, founded by the Central Bank.

Citing Armenia’s Law on the Central Bank, Tandilyan says the deal is a gross violation of the law that bans the regulator from interfering in the activities of commercial banks.

“What was the actual purpose of the Central Bank in becoming a shareholder of Armbusinessbank? Why didn’t the Swiss company acquire all 100% of the shares? How much did the Central Bank pay for the purchase of the commercial bank’s shares?” questions Tandilyan, pointing out that the existence of these and many similar questions make this transaction non-transparent, accompanied by a clear conflict of interest.

She also touched on the recent appointment of former Armenian Deputy Prime Minister Tigran Avinyan to the Board of Armbusinessbank.

“I tend to think that Swiss investors appreciated Avinyan’s experience as a loan officer in one of the banks 10 years ago. According to some rumors, Armbusinessbank used to act as an intermediary in suspicious deals of influential representatives of the authorities, which led to its financial problems,” Tandilyan wrote.

She expressed hope that the Central Bank will give proper comments on this mysterious deal and law enforcement bodies will at least look into the facts.

About Armbusinessbank

According to the information placed on the website of the bank, its new shareholders are MFM Global Invest LLC, Switzerland (74,998%) and the refinancing credit organization Housing for the Young Families, Armenia (25,001%).

Previously, the bank’s shares were owned by citizens Vital Grigoryants (95%) and Arsen Mikayelyan (5 %.)

According to the official data, the bank’s profit in 2021 decreased by 70.31% from the previous year to 537.2mln drams.  Its total capital dropped  by 4.7% to about 52.7 billion drams, total assets decreased by 1.7% to 883.9 billion drams, and total liabilities decreased by 1.5% to about 831.2 billion drams.

Also, its loan portfolio decreased by 6.3% to 610. 2 billion drams. At the same time, the share of non-performing loans in the total portfolio stood at 1.8% against 2.3% in 2020.

ARKA news agency has request a comment from the Central Bank concerning this deal. ($1 – 479 drams).

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