News

The Banks have been actively involved in the implementation of programs aimed at neutralizing the economic consequences of COVID-19.

(Interview with Ruben Hayrapetyan, deputy Chairman of ARMECONOMBANK OJSC Board)

Mr. Hayrapetyan, the spread of COVID-19, as well as the restrictions directed to the prevention of the virus, are causing huge damage to the worldwide economy and the banking system is not an exception. What impact does this virus have on RA banking system?

The beginning of 2020 was marked by continuous economic activity; there were all the preconditions to ensure the further economic growth of the Republic of Armenia. However, the announcement of pandemic hit the global economy and RA economy was not an exception.

It is natural that the decrease in the activity of global economy cannot but affect the economy of Armenia, which, doubtless, has and will have an impact on RA banking system. The plans envisaged by the banks for 2020 must be changed; the banks must bring their tactics to conformity with today’s reality.

Today, there is almost no sphere which has not encountered difficulties and isn’t incurring losses. Hotel business and tourism, are probably the most affected sectors.  The companies engaged in aforementioned sectors and their employees are the customers of the Bank.

As you know, Armenian banks granted credit holidays to their customers to support them, but the obligations of the customers are subject to fulfillment starting from 1^st of July. The information on overdue liabilities is already being submitted to the credit bureau, which may result in the increase of share of non-performing assets in the banking system.  An additional work and investments will be required from the Banks to overcome the difficulties caused by the growth of this indicator.

Mr. Hayrapetyan, in conditions of COVID-19, the population is very dissatisfied with the banks ; the latters are criticized by the citizens being represented as usurious institutions.

As I have already mentioned, the banks assisted their clients by providing them credit holidays and reviewing loan repayment schedules. ARMECONOMBANK OJSC has already reviewed more than 66.500 loans. Nevertheless, you can understand, the capabilities of the banks aren’t inexhaustible. The banks themselves are borrowers; they pay interests against the attracted loans and deposits and bear responsibility towards their depositors and international institutions.  

The banks support their clients, surely, to the best of their abilities, so it is wrong to target banks and demand more, as the latters can not directly donate the depositors’ money and monetary funds attracted from other sources. Those who are borrowers today must not forget about the depositors’ interests and must reckon with them as well. The investment of a deposit is a successful business option for an individual which allows him/her to receive passive income.

I would like to note that the banks have not remained indifferent and actively participated in and contributed to the implementation of programs aimed at neutralizing the economic consequences of COVID-19 by lending the customers at the expense of their resources and risks.

As it has recently been stated in the message published by the Union of Banks of Armenia, 947 credit applications in the amount of nearly AMD 59 bn. have been approved as of 7^th of July within the framework of 1^st anti-crisis measure, moreover the prevailing part of this amount falls to the subsidized loans, which the banks grant at the expense of their resources and risks. ARMECONOMBANK OJSC has already provided loans of approximately AMD 5.8 bn at the expense of its resources within this program. In addition to the Government’s programs, ARMECONOMBAK OJSC  also lended various sectors of the economy.

The banks continued their regular work under the conditions of universal quarantine ensuring continuity of the processes; thousands of citizens have been served within the framework of social programs. Moreover, the banking system was overloaded. It can be said that the employees of banks worked on the frontline, for which they really deserve the praise.

Mr. Hayrapetyan, what would you say about the RA Government’s programs directed to the neutralization of consequences of the pandemic?

From the very beginning of coronavirus pandemic, the countries of the world have faced two serious problems- protection of public health and neutralization of economic consequences of the virus.  Realizing that the proper organization of social programs is a significant component to fight the coronavirus, various countries started to develop different programs to mitigate the disastrous consequences of the virus. Observing the measures taken by governments of different countries around the world, it was obvious that some countries lagged behind in this respect. RA Government responded to the situation quite quickly and took urgent actions to implement measures to address the impact of COVID-19. Moreover, the response was as comprehensive and targeted as possible aimed at supporting both socially vulnerable physical entities and businesses. RA Government has already provided support of  AMD 103 bn within framework of this program.

Mr. Hayrapetyan, in conditions of emergency state, the banks have started to pay serious attention to the remote work. What is the situation in ARMECONOMBNAK OJSC in this regard?.

40% of the employees of ARMECONOMBANK OJSC has started to work remotely, which allowed to reduce the number of workers entering the Bank at the very beginning of the emergency state.

As for the customers, the Bank repeatedly urged to avoid visiting the Bank and use online services of the Bank. By the way, ARMECONOMBANK OJSC has recently introduced the updated AEB Mobile Banking application and AEB payments online payment system, which grant the bank’s customers wider opportunities in that term.

Today, technologies are rapidly developing, and the customers should enjoy the opportunities provided by modern technologies as much as possible, which allow not only to save time but also, which is rather important today, to avoid visiting crowded areas and prevent the spread of the COVID-19.

Mr. Hayrapetyan, it is possible that the banks will suffer some losses in these conditions, which may affect their capital and income. How is the bank planning to face the challenges?

Although, currently ARMECONOMBANK OJSC has a sufficient level of liquidity and there isn’t necessity to increase the capital, the bank is regularly taking measures to replenish the capital by carrying out new distributions of shares. In 2019 and 2020, the Bank’s equity was supplemented with AMD 3,37 bn. and AMD 500 mln. respectively. In the upcoming month, we are planning to announce about the 18^th issue of common shares, as a result of which the Bank’s capital will be supplemented with AMD 800 mln. I would like to state that the Bank already has 4600 shareholders by the results of the previous distribution.

As a conclusion I would like to cherish the hope that the situation conditioned by COVID-19 will end soon and all of us, the banks, depositors, borrowers, international partner organizations of the banks, will return to our pre-crisis relationships.