Armenian office of Latvian Rietumu banka ready to finance projects with up to $10 million budgets

28.11.2011 18:46
Armenian office of Latvian Rietumu banka ready to finance projects with up to $10 million budgets

Exclusive interview with Arkady Sukharenko, Deputy Chairman of Rietumu Banka, with ARKA news agency

ARKA - Mr. Sukharenko, which are the priorities that Rietumu Banka Armenian branch is going to concentrate on?

Arkady Sukharenko – Since we are a corporate bank, we are interested in credit and investment sphere. Our customers are medium and large businesses and top business executives. We are not going to start with large projects, and will enter the market gradually, step by step as we learn more and more about our potential clients. We emphasize such factors as customer decency, legislation and treatment of investors. Our next step will be to think about increasing investments. For example, we are interested in small power plants; in Latvia we have relating projects. We are also interested in logistics projects since Latvia has extensive relating capabilities. Besides, we would like to offer local companies trade financing services and work with clients engaged in international businesses. We are a conservative bank, respecting all players in the market.

ARKA – How much the bank may invest here in the initial phase of its operation?

Arkady Sukharenko - I think it will depend on projects. We do not have plans to make $100 or $200 million investments. Our task is to find interesting projects and finance them. If it requires $50 million, we will finance it, if it requires $100 million, we will also finance it.

ARKA - Do you have any blueprint arrangements in terms of finding suitable projects for funding?

Arkady Sukharenko – No yet, we have been involved so far in the technical issues related to the opening of the representative office, working with documents and renting premises.

ARKA - And when can we expect the branch to get down to real work?

Arkady Sukharenko - This will largely depend on us, on how successful we are in promoting and presenting our capabilities to Armenian business people. I hope we will begin this work as soon as possible.

ARKA – Probably, before coming to Armenia the bank’s analysts had studied the Armenian market, including from the perspective of competition. How do you assess Armenian banks from this angle?

Arkady Sukharenko - We see that there is a niche here for us. Everything should be done properly without hurting the interests of Armenian banks, because this is the rule of fair play. But we also see that Armenian banks are not very large in size. And besides, we have a great experience in being a bridge between East and West.

If there are large size projects we can finance them by syndicated loans. I think we can cooperate with some Armenian banks. To provide investments is only part of the problem, the other part is project management since the objective of any private bank is to make profits.

ARKA - Do you have any agreements with Armenian banks?

Arkady Sukharenko
- We are holding first meetings here, and I would not like to talk about a partnership. We have extensive experience in financing commerce, in business building technology and I think it would also be interesting to local businesses.

ARKA – The Pan-Armenian Bank has began its operation recently. It positions itself as an investment bank. Are you considering a possible cooperation with this financial institution?

Arkady Sukharenko – I have heard that it is a development bank, and I am confident that we have a strong interest to cooperate with it. A development bank’s interest is in the country’s economic progress and for a commercial bank it is very profitable and interesting to cooperate with a state-owned bank.

We will certainly look for opportunities to partner in some projects. As of November 1, our capital was $300 million and the assets a little over $3 billion. I think that we shall finance projects with up to $10 million budgets.

ARKA – And what about small and medium-sized companies? Are they within the scope of the bank's interests?

Arkady Sukharenko – Yes, they are. I think we will cooperate with medium-sized business. Given the fact that the success of the bank is the success of its clients, we try to make this mutually beneficial.

ARKA - Given the fact that Rietumu Banka enters a new market ahead of an anticipated second wave of crisis, we would like to know your forecasts not only in relation to Armenia, Latvia and the CIS, but also to Europe and the world.

Arkady Sukharenko - I think the largest problem today is the information environment. Information is available and quickly transferable now. I believe that we should be optimists. If you are told all the time that the second wave will come, it definitely will do, because people stop spending, and companies cut production. I believe that Europe will cope with its problems, but it is not going to be a quick process, because it is faced with a systemic problem.

Sovereign debt issues are not easily solved, because a huge portion of that debt is the government’s social responsibility. Cutting social programs is always very hard; no nation in the world would greet it. However, Europe will cope with this problem.

Entering a new market when all is well creates a highly competitive environment than when entering a new market, when many people think whether it is worth doing. However, we are conservative and are not going to run anywhere, and will move ahead step by step. -0-


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