YEREVAN, NOVEMBER 3, NOYAN TAPAN. An agreement on the European Bank for Reconstruction and Development - EBRD's stake of 25%+1 shares in the authorized capital of Araratbank OJSC was signed on October 12. EBRD aqcuired the indicated stake in Araratbank for 7 million dollars, as a result of which the bank's authorized capital will amount to 24 million USD against the previous 13 million USD. By the conclusion of this deal, 70% of Araratbank's shares will belong to Flash company whose owner is the chairman of Araratbank's board Barsegh Beglarian, while the other shares will be in free circulation. The agreement was signed by the EBRD Director for the Caucasus, Moldova and Belarus Michael Davey and Araratbank's Board Chairman and Executive Director Ashot Osipian. After the signing ceremony M. Davey stated that becoming a shareholder of Araratbank expresses EBRD's trust in this bank. In his words, dramatic changes are taking place in the world's financial markets, and EBRD focuses its activities on overcoming the financial crisis in various countries. However, it does not apply to Armenia as EBRD's investment as a shareholder is the fourth one in the Armenian banking system which reflects EBRD's trust in the banking system of the country. Besides, by signing the indicated agreement EBRD asserted its trust in the managers, shareholders and staff of Araratbank. M. Davey expressed his satisfaction at the fact that by becoming a shareholder of Araratbank, EBRD will contribute to increasing the employment level in Armenia and developing its economy. B. Beglarian said that the agreement's signing is an important step not only for Araratbank but also for the whole economy of Armenia. According to him, the activities of Araratbank will be based on new technologies and modern banking standards in the future as well. It was stated that huge work was done in this direction, which is evident from the financial indices of the bank and the society's trust in it. The Chairman of the Central Bank of Armenia (CBA) Arthur Javadian considered the siging of the agreement as a significant event in the economic life of Armenia as on behalf of EBRD international financial structures once again asserted their confidence in the reforms being implemented in Armenia, as well as in the Armenian dram because EBRD's shareholder investment was made in drams. By doing so EBRD once again expressed a high opinion about the monetary and supervisory policy of CBA. A. Javadian also explained EBRD's shareholder investment in Araratbank by the use of modern corporate governance rules in this bank. The RA minister of finance Tigran Davtian in his turn said that the agreement signed between EBRD and Araratbank is a serious step in terms of developing the Armenian financial system. In his words, it is symbolic that the agreement was signed under conditions of an international financial crisis which shows that the financial system of Armenia is continuing to develop in a sustainable and confident way and to attract new resources from influential international financial structures. The minister underlined that EBRD's active participation in Armenia's banking system rises into a new quality as it symbolizes trust in the country's banking and financial systems and the prospects of its sustainable economic development. Ashot Osipian said that EBRD is quite an efficient owner as by introducing modern banking technologies and improving the corporate governance and risk management systems, it guides commercial banks in their work to occupy leading positions in financial markets. In his opinion, thanks to EBRD's participation in the capital of the bank, the old and new shareholders of Araratbank will become owners of rapidly growing and reliable assets which grew by 36% in 2008, while the book cost of the bank's shares increased by 700 drams (over 2.28 dollars). Their nominal value makes 5 thousand drams. As of October 1, 2008, the overall capital of the bank made 5.4 bln drams, growing by 17.2% in 2008. The growth was due to profit investment and replenishment of the authorized capital by 381.5 bln drams as a result of the direct public sale of shares in early 2008. Araratbank currently has 86 shareholders. Its overall assets grew by 10.5% in the second quarter of 2008 and made 28.3 bln drams, while its credit investments grew by 8.4% to 13.241 bln drams. The overall liabilities of the bank grew by 12.2% or 2.5 bln drams in the indicated quarter, including the growth of deposit accounts of natural persons by 35.7% or 584 mln drams. The current profit of the bank increased by 186 mln drams to 515 mln drams in the second quarter of 2008.

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