According to experts’ forecasts, Armenia’s economy is near to overcome the financial crisis, which has taught good lesson, revealing its most vulnerable sides - weak diversification, dependence on remittances, and bringing forth the necessity to stimulate local manufacturers for boosting export opportunities. General Manager of ProCredit Bank Armenia, Mr. Bertolt Hertzfeldt presented his vision for 2010 in an interview with PanARMENIAN.Net.
What trends are observed in Armenia’s economy and, specifically, in the country’s banking sector?
We carefully follow the forecasts by international structures and experts concerning Armenia’s macroeconomic growth and, judging from it, make our own predictions. Hopefully, these will come true and the economic growth in the republic will be within 2-3%. As for inflation, there are certain difficulties related to the national currency instability, increase in prices for energy carriers that has a negative impact on business, specifically, on small and medium businesses development. As a whole, it is difficult to give such estimation, as each bank pursues its own policy depending on the selected strategy. Meanwhile, activation is observed at the crediting market, based on results of the first three months of 2010.
Does the bank plan to increase its portfolio and attract additional funds from international structures, given the crediting activation?
The bank’s credit portfolio totaled $33mln as of the end February 2010 and we are resolute to double it until the end of this year. The agriculture funding is a new direction in the crediting field. At the end of 2009, the bank launched the project in a new branch in Artashat, Ararat region. We plan to expand and get more experience in this field during this year. Works on study of agriculture market potential in Lori and Shirak regions are carried out to fulfill funding in Vanadzor and Gyumri, where our bank’s branches are successfully developing. The bank also implements agriculture financing in suburbs of Yerevan. Although the amount of these credits is not significant in the entire credit portfolio, the funding prospects are not limited. From October 2009 some 100 credits were provided at the total amount of $2mln.
However, the attraction of population’s deposits is another important task the bank has undertook in the framework of the selected strategy. Since the economic situation in Armenia tends to stabilize and activation is observed at the AMD crediting market, we, for our part, try to attract deposits in the local currency. The bank also collaborates with international funding organizations, negotiations are conducted to attract additional funds.
What changes are expected in interest rates for credits and deposits?
We offer attractive interest rates for both credits and deposits. The rates were changed recently and no significant changes are expected in the near future. We increased the interest rates for deposits that will help Armenian citizens develop savings culture.
Could you expand on ProCredit Bank’s plans to improve the services provided?
We believe that provision of high-quality services is one of the most typical features of ProCredit Bank. Improvement of employees’ professional level is a guarantee of success, and the bank allocates serious funds for organization of employees’ trainings and seminars, which take place both in Armenia and in regional Academies of ProCredit Group located in Germany and Macedonia.
As for new services, recently the bank introduced a single system of utility payments. Overdrafts are also among innovations, basically meant for the current clients receiving their salaries through our bank and for those business-clients, who already work with the bank and have turnover for settlement accounts. The bank plans to expand its regional network and that is why three out of nine branches of the bank opened in Armenia’s regions during two years of its activity. In 2010, closer to the mid-year, we will decide on the number of new branches, most likely there will be two of them. The number of ATM machines increases proportionally to the number of branches. Online banking services will be launched by the mid-year, the project being already tested.
Which priorities should Armenia’s banks focus their attention in 2010?
In 2010, the banks shall pay attention to crediting of the economy’s real sector that will eventually secure economic growth. Indeed, there is a problem with reduction in the amount of remittances, which come to Armenia from various countries and enable enough demand for crediting. On the other side, through successful financing of companies we can actually secure job opportunities and salaries, what is important for its diversification, as the growth recorded in Armenia during many years was conditioned basically by development of the construction industry. That’s why currently all efforts shall be aimed at diversifying and developing the economy’s real sector.