CEE & CIS news round-up

Published: June 13, 2016

Ameriabank secures funding that should drive consolidation.

Development banks boost Armenian banking sector

Ameriabank, Armenia’s largest bank by assets, secures funding that should drive consolidation and interest in its planned IPO.

The International Finance Corporation (IFC), a member of the World Bank Group, announced that it would provide a US$50mn subordinated loan to Ameriabank, the largest bank in Armenia by assets, loans and deposits in January.

This coincided with news that the European Bank for Reconstruction and Development (EBRD) is investing US$40mn in the bank, first, by acquiring a twenty percent stake for US$30mn, and then by providing a further US$10mn in future capital increases. It is the largest single-ticket equity deal the EBRD has signed in the Caucasus region to date.

Both financing commitments will boost Ameriabank’s capital base, allowing it to increase lending, and help it to prepare for an initial public offering (IPO) planned later this year. There is the prospect that the bank might pursue a strategy of mergers and acquisitions in the local market, leading to further consolidation in Armenia’s banking sector.

“We are delighted with IFC’s trust. This transaction is a hallmark of quality for our bank operating in this market. We are confident this cooperation has many avenues to explore for the benefit of our organisations and Armenia’s banking sector,” said Andrew Mkrtchyan, chairman of the board of directors at Ameriabank, at the signing.

“We also highly appreciate this new level of partnership with the EBRD. It is a great support for Ameriabank in global capital markets in line with our strategic goals and aspirations,” Mkrtchyan added. “I am sure that our joint efforts will promote the development of Armenia’s banking sector and contribute to economic growth in our country.”

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