-Mr. Abrahamyan, just a few days ago you were appointed Chairman of Management Board at IDBank. Why did you accept that offer?
-I accepted the bank’s offer for several reasons, but I will highlight the two main motives behind my decision. Firstly, the strategy which the bank’s shareholders adopted and which outlines key areas of development is fully compliant with my understanding of a modern bank. I am certain that once implemented, this direction of work and fundamental goals will make IDBank one of the most competitive banks in the market.
Secondly, my working experience was connected with state structures for the most part and I wanted to try it in the private sector as well, especially since the area of focus remains the same – banking. After so many years with the Central Bank, armed with thorough knowledge of all issues in the sector, I am confident I can have my input in IDBank’s development and progress.
-As a former employee of the banking regulator, how do you evaluate IDBank?
-IDBank has evolved drastically over the last two years. The bank leads by capital indices and boasts substantially improved financial indicators. As you know, IDBank has 28 years of experience in Armenian banking sector and uses it in the best way to develop and grow stronger. Undoubtedly, the rebranding refreshed the bank’s image and reputation, and now it is perceived as an innovative, modern bank. We have no intention to stop at that and our work will bring in new clients and keep them as reliable partners. IDBank has all preconditions to become a first choice bank: a professional team, the ability to make investments, and the trust and support of the shareholders.
-Council chairman and IDBank’s top managers often say that the bank adopted a strategy aimed at digitization and high quality customer service. What is your vision for development of IDBank?
-The strategic goals frequently mentioned by the Council chairman and the top management have great potential, I think. I am talking about digitization, remote services, and generally about modern, innovative and high quality client service.
Modern technologies have infiltrated all areas of our life and started defining the prospects of their development. The winners will be the banks that place a high priority on technological innovations, which are ultimately aimed at providing simple, affordable, fast and convenient services to the clients.
It should also be noted that technological progress facilitates simplification of the bank-client relations and enables the bank to reduce operational costs, improve financial indicators, increase competitiveness and remain a reliable partner for the clients.
-Given your experience in finance, what is your view about Armenia’s banking sector?
-If I have to put in it in two words, I’ll say stable and reliable. Both the Central Bank and the main actors of the market (the banks) play an important role. The last ten years showed that Armenia’s banking sector is established and steady enough to withstand multiple economic shocks. Recently it also proved its viability and stability in case of unpredictable political developments. Not only did the banking system avoid fluctuation during and after the revolution, but it also registered significant improvements of the main indicators. The most important index here is the continuously growing public trust towards the banking system. Touching upon the IDBank’s goals, I would like to note that we are committed to ameliorating that exact indicator by proving that customers’ trust plays a pivotal role in our operation.
-Banks recorded overliquidity after the Central Bank raised minimum capital requirement, which has led to rapid improvement of loan portfolios. Certain analysts hold that similar acceleration will reduce the liquidity. How would you estimate the situation?
-The banking system is quite liquid now. Current level of capital gives the opportunity to continue the crediting expansion in the coming years. However, liquidity is not only conditioned by the capital, but also by the trust and stability, which we have already mentioned as the most important preconditions. These factors enable the banks to smoothly carry out their operation, which is the financial mediation.
-To sustain the trust and stability, the banks have to show certain minimal ratio of capital and assets. It is known that the Central Bank regularly imposes stricter requirements on capital. How will the implementation of Basel III reflect on the banks?
-First of all, I would like to note that the constituent relating to the capital structure and composition, provided for by the Basel III has already been implemented. The additional buffers are found in the investment stage. There are three main types of buffers: countercyclical capital buffer, capital conservation buffer and structural buffer. The incorporation of these components in the long run will strengthen even more the banking system and sustain its stability. Taking into consideration the fact that the Central Bank will gradually implement Basel III, the banks will have the chance to smoothly adapt to new conditions and relevant requirements. Let me remind that many developed and developing countries have already implemented this system, and Armenia isn’t an exception in this regard.
-It is known that the Armenian banking is quite a competitive sector. What is IDBank going to offer to attract the customers?
-The competition is indeed very active, and I assure you that we are only happy about it. The competition is the driving force that encourages the banks to invest in new services and innovative methods and be different from the others. We are ready to make significant investments in technology and human capital, as we prioritize both resources equally. However, the most innovative and creative players will be able to succeed by providing the customers with the most convenient and affordable services. IDBank has already adopted client oriented strategy. Frankly speaking, it is simply necessary to love the customers, doing everything for their convenience and satisfaction. We also need to be flexible with modifications, no matter if those are changing wishes of customers or new conditions dictated by the market. We have remarked on many occasions that we will prove in the coming years that the time for changes has come.