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Armenia's Araratbank Mulls Debut IPO

Armenia’s Araratbank Mulls Debut IPO

Armenia’s Araratbank, one of the largest lenders in the former Soviet country, is considering launching an initial public offering (IPO) as it seeks to increase its capital buffers, the bank’s CEO said on Friday.

The move follows the Armenian central bank’s increase in the regulatory minimum capital requirement for commercial banks to 30 billion dram ($63 million) from 5 billion dram, effective from Jan. 1, 2017, to improve stability of the sector.

Araratbank is controlled by Armenian financial and trading company Flash. The European Bank for Reconstruction and Development holds a 25 percent stake while Rural Impulse Fund, a subsidiary of international investment company Incofin, owns 10 percent.

“We are currently in talks with one company on a placement outside Armenia… everything will depend on price,” Araratbank CEO Ashot Osipyan told reporters without providing further details on the size of the proposed IPO or an intended date.

Osipyan added that the company, which reported a 942 million dram net profit for 2015, also plans to boost capital after this month through the sale of new shares to existing investors.

Araratbank’s capital currently stands at 22 billion dram and Osipyan said the new share issue will raise a further 8.5 billion dram. ($1 = 476.5000 dram) (Reporting by Hasmik Mkrtchyan; Writing by Margarita Antidze; Editing by David Goodman).

Source: reuters