Ararat Bank

Location:

Armenia

Project number:

39301

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

25 Jul 2008

Status:

Complete

PSD disclosed:

13 Mar 2012

Translated version of this PSD: Armenian

Project Description

The EBRD is considering subscription to newly issued ordinary voting shares of OJSC Araratbank (AB) of approximately 250 million Armenian drams (US$ 650k equivalent) as part of Araratbank’s capital increase of 1,000 million drams (US$ 2.6 million equivalent). As a result of the capital increase, Araratbank ("AB") will become a more effective competitor in the local market through implementing its growth strategy.

Transition Impact

In the longer term, Araratbank will present itself as a good platform for further development by a strategic investor thus further intensifying the overall competitive structure of the Armenian banking sector. The proposed project supports the development of Araratbank to enable it to expand its customer base through increased financial services to the MSME sector.

In addition, the capital raising will provide AMD 1 billion of local currency lending, which will assist Araratbank to improve their local currency/ foreign currency asset/liability management.

The Client

Open Joint Stock Company Araratbank, a privately owned commercial bank operating in Armenia. The bank provides a wide range of banking services to corporate, MSME and retail customers. Ararat Bank is focussed on micro, small and medium-sized companies as its main clientele, with individuals being the second largest client group.

EBRD Finance

Subscription to newly issued ordinary voting shares of approximately 250 million drams (AMD).

Project Cost

AMD 250 million.

Environmental Impact

Categorised FI. Araratbank has adopted and is implementing environmental and social due diligence and monitoring procedures, and complies with the Bank's Environmental Social and Exclusion and Referral List. Araratbank's policies and procedures are generally compliant with the requirements of EBRD's Performance Requirement 2 and 9. Some recommendations for additional improvement have been formalised in an action plan and agreed with Araratbank.

Technical Cooperation

Previous technical assistance included Institutional Building Programme which linked the Bank’s equity investment in the institution. The technical cooperation was designed to assist the bank in developing its policies and procedures, strategic planning, review of IT and recommendations on improvements, assistance in design of the marketing strategy among other objectives. Donor funding was provided by the EBRD Early Transition Countries (ETC) Fund and the EBRD’s Shareholder Special Fund (SSF).

In addition, technical assistance was provided to Araratbank under the Armenia Micro-lending Programme. The assistance was designed to expand programme’s institution-building to ensure increased lending to MSMEs and improved skills and knowledge within the banking sector. Donor funding was provided by USAID, the EBRD Early Transition Countries (ETC) Fund and the EBRD’s Shareholder Special Fund (SSF).

Company Contact

Mr Davit Harutyunyan, Deputy CEO, Araratbank OJSC, 19 Pushkin street, Yerevan, Republic of Armenia.

Telephone: +374 10 547962

Fax: +374 10 547894

E-mail: araratbank@araratbank.am

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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