Mr. Ghukasyan, what direction will the Bank develop in, and which niches in the market do you consider being the most efficient for "Converse Bank"?

The Bank strategy through 2010, after discussion with the Bank owner has recently been submitted to the RA CB which is based on theses. The plan is continuation of the current activity with some corrections. I will not go into detail, but I will note that one of the first and principal steps, regardless of which scenario between the two we select, will be the process of consolidation of all, without exception, resources of the Bank, including customer base, HR, service, etc. The review of the strategy is conditioned by the Bank having to adjust the areas of its activity and to promote the rate of growth as a universal bank. Particularly, we plan large-scale enlargement of the Bank branch network presently counting 23 subdivisions throughout the Republic. In this respect a special focus will be on the reinforcement of the presence in the regions of Armenia. Depending on the rates of consolidation of our resources, 10 new branches are planned to be opened by the end of this year. Besides, we intend to cardinally update the IT base aligning it to modern requirements. In respect of products, "Converse Bank" was and will remain universal, which offers its services to all segments of the population, including through a broad spectrum of consumer loans, maintenance of accounts of individuals and legal entities, extension of special packages to corporate customers. It is worth mentioning that presently we conduct negotiations with a number of international structures, and if their proposals comply with our interests, great bank activity under international projects is not excluded. We also intend to enlarge the products mix itself, certain steps are intended to renew the Bank's image.

Is the resource base ready for the realization of all this project?

Presently the volume of required resources is being calculated. "Converse Bank" concluded the year 2007 with high financial indexes, thus the volume of the capital allows implementing all plans on account of our own assets, therefore the Bank is ready for these expenses. In one word we will invest as much as necessary. The Bank also has good potential of human resources. Certain steps will be implemented aimed at improvement of the HR base. First of all we will work on enhancement of the internal HR base qualification, and specialists from the market will be attracted if necessary. Presently, a new subdivision of risk management is being established, the functions thereof are not limited to isolation of the Bank from different types of risks, it will work on increase of the Bank transactions efficiency.

How will the strategic updating influence the corporate governance of the Bank?

The corporate management will also undergo certain changes. In particular, the authority decentralization policy will be implemented. This means segregation of authorities and responsibilities. Thus, the Bank job efficiency will essentially increase. Good relationship between the professional management, Bank Board and shareholders will by all means be maintained.

Presently, "Converse Bank" cooperated with the "Armenian Card" local payment system and Visa International. Does the new strategy provide for cooperation with MasterCard?

We do not regard it as necessary, as the local market is not large enough yet. It is better to work with one international system, offering services under good terms, than with two. Currently, the number of plastic cards issued by "Converse Bank" is 21 thousand, including 20 thousand Visa cards. The number of issued plastic cards is planned to reach 30 thousand by the year end.

It is noteworthy that "Converse Bank" activity participates in International loan projects on agrolending, micro loans, SME Loans. However, you are not yet involved in International mortgage lending programs.

Actually the Bank loans under the Enterprise Development Project, WB ARSP /Agriculture Reform Support Project/, IFAD /International Fund of Agriculture Development/ Agricultural Services Project, SME Lending Program, as well as Express-24 loans of GAF. Recently we have been accredited by the Millennium Challenge Armenia for participation in the water supply project, where under we should receive 5 tranches. The share of loans extended by the Bank under International programs is 15-20% of the Bank loan portfolio, the latter currently amounting to the AMD 31 billion.

Mortgage lending is one of the strategic areas for the Bank. We possess sufficient of our own resources for the extension of mortgage loans. Presently the volume of mortgage loans portfolio is AMD 2 billion and we plan to increase it to AMD 5 billion by the year end.


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