EBRD buys $40 mln equity stake in Ameriabank

PanARMENIAN.Net - The European Bank for Reconstruction and Development (EBRD) is investing $40 million in the acquisition of an equity stake in Ameriabank CJSC, one of the leading private banks in Armenia. This is the largest single-ticket equity deal the EBRD has signed in the region to date.

The EBRD and the bank signed the agreement on Thursday, January 21 in Yerevan.

As a first step, the EBRD will acquire a stake of around 20% for $30 million. The remaining $10 million will be used for future capital increases. The goal of the investment is to strengthen Ameriabank and prepare the bank for a future IPO. In the course of 2016 an independent director representing the EBRD will join Ameriabank’s Board of Directors.

Prior to a possible listing, the EBRD investment will support the growth of Ameriabank by providing additional funds for lending to large corporate and private customers, small and medium-sized enterprises and retail customers. More lending to the real sector will strengthen the growth of Armenia’s economy. This will open new opportunities for further lending as well as for engaging in possible M&A transactions in the local market.

The decision to become a shareholder in the bank reflects the EBRD’s positive expectations for the development of Ameriabank, and recognizes the important contribution that Ameriabank makes to the growth of the Armenian economy, banking sector and society.

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

According to Mkrtchyan, Ameriabank has grown steadily in recent years. With total capital now close to $200 million, the bank’s total assets topped $1 billion at the end of 2015, a record in Armenia’s financial sector, he stressed.

Mark Davis, EBRD Head of the Yerevan office, said: “We welcome the opportunity to become a shareholder in Ameriabank and see this as a further step towards strengthening and consolidating the local banking sector. Increased access to finance is key to enabling local companies to realize their potential. As a shareholder, the EBRD will support Ameriabank’s development, with a special emphasis on corporate governance.”

Since the start of its operations in Armenia in 1992, the EBRD has invested over €1.04 billion in 148 projects in the country’s financial, corporate, infrastructure and energy sectors, with 88% of these investments being in the private sector.

Chief of Armenia’s Central Bank noted, in turn, that Armenia is quite attractive in terms of investments.

“The current situation in Armenia’s financial markets is pretty attractive for investments,” Arthur Javadyan said, adding that the deal will have a positive impact on the country’s banking sector.

The EBRD, owned by 64 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to Central Asia.

As an absolute leader in the market by assets, loans, liabilities and deposits, Ameriabank provides full-fledged solutions in corporate, retail and investment banking. Having multiple excellency awards by Euromoney (2014, 2012, 2011), Global Finance (2015, 2012, 2013), The Banker/FT (2015, 2013, 2010), Ameriabank is committed to invest in cutting-edge technologies and unparalleled customer service.