Iranian Mellat Bank to step up activities in Armenia

21.01.2016 16:26
Iranian Mellat Bank to step up activities in Armenia

YEREVAN, January 21. /ARKA/. The Yerevan-based Iranian Mellat Bank plans to increase the size of its capital to 30 billion drams to meet Armenian Central Bank’s revised requirement, the bank’s executive director Seyed Mousavi Holamreza said in an interview with local daily "Zhamanak" (Time).

He said the move will allow the bank to increase its role in financing trade in Armenia.

In 2014 December Armenia’s Central Bank raised the minimum amount of commercial banks’ total capital to 30 billion drams from the current 5 billion drams to become mandatory from January 1, 2017.

According to the Central Bank, the measure is aimed at encouraging mergers and consolidation of banks, which is expected to create a sound competitive environment and make banking services more available. The regulator said also it expects this measure to increase the flexibility and the ability of the banking system to withstand shocks in different economic situations, and help advance financial intermediation.

According to Seyed Mousavi Holamreza, since its inception in Armenia 20 years ago Mellat Bank has never sent its revenues to Iran, using them to replenish its capital and invest in various projects in Armenia.

"In order to replenish the bank's capital to 30 billion drams we had to move our resources from outside to Armenia, which was not possible under Western sanctions against Iran. Today we can do it. At the moment we are negotiating with Asian and European banks for opening mutual correspondent accounts that also was impossible under the sanctions," he said.

He said Armenian banks could not have correspondent accounts in Mellat Bank either and that hindered the implementation of cross-border transactions, but "after the lifting of sanctions, it will be easier for the bank to operate in Armenia."

Mellat Bank’s clients are mainly small and medium enterprises involved in trade between Armenia and Iran, as well as tourists and students.

The bank's assets at the end of the IV quarter of 2015 stood at 29.4 billion drams (a growth of 6.4%), liabilities stood at 10.1 billion drams (a decline of 38.3%), and the capital was worth 19.3 billion drams (an increase of 72.1%). The bank ended the quarter with profit of 673.8 million drams (up 5 times). ($1 - 485.69 drams). -0-

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