Unibank - Investment opportunity in Armenia

33 Pages·2016·2.96 MB·English

Unibank - Investment opportunity
in Armenia
2016
Armenia and Armenian Banking Sector
Unibank: Historical Results and Investment proposal
Unibank: Growth Strategy
01
Armenia: Main Macroeconomic Indicators
Full name – The Republic of Armenia Main segments of economy
Agribusiness, Mining, Tourism, Health & Pharma,
Population - 3,006,154

Jewelry, Watchmaking& Diamonds, I T Engineering
Capital – Yerevan
Sovereign Country Ratings:
Area – 29.743 sq. km (18.481 sq. miles)
Fitch – B+, stable (February 2, 2015)
Major languages –Armenian (official),
Moody’s – Ba3 , stable (January 16, 2015)
Russian (common), English (growing)
Global competitiveness report 82 (World Economic Forum)
State religion – Christianity
Human development index 85 (UNDP)
Life expectancy : male -70.9, female -78.6
Monetary unit – Armenian dram (AMD)
Exchange rate - As of Dec 31,2015: 483.75AMD/USD
02
Macroeconomic Stability
11% Peer Average Real GDP Growth Rate 2010-2015
With a 5 year compound
8%
annual growth rate of 4.2%
6%
outpacing peer countries.
5% 5% 5%
4%
4%
3%
3%
2% 2% 2015
1%
-2% $11 billion GDP
n n n n y a a a c n s a n e $3,515 GDP per capita
rkmenista Uzbekista Tajiksta Kazakhsta Turke Georgi Moldov Armeni yz Republi Azerbaija Belaru Russi Ira Ukrain $$284,0.37 0b iGllDioPn ( PGPDPP) (pPePrP c)apita
u g
T r
y
K
29%
Peer Average Inflation Rate 2010-2015
CPI
22%
Armenia has one of the lowest
13%
inflation rates in the region with a
11%
5 year average annual inflation
8% 8% 8% 8%
7% 6% 6% rate of 5%.
5%
4% 4%
Belarus Iran Ukraine Uzbekistan Russia Kyrgyz Rep. Turkey Tajikstan Kazakhstan Moldova rkmenistan Armenia Azerbaijan Georgia
u
T
03
Ease of Doing Business
Georgia 24 Armenia Rank Armenia is continuously improving its
Starting a business 5 positions in the positions ranking of WB
Armenia 35
Dealing with construction permits 62 on the ease of doing business.
Kazakhstan 41
Getting electricity 99
Belarus 44
Registering property 14 By the ease of doing business
Russia 51
Getting credit 42 Armenia ranked 43th in 2010,
Moldova 52
Protecting minority investors 49 while in 2016 the country
Turkey 55 Paying taxes 41 is the 35th.
Trading across borders 29
Azerbaijan 63
Enforcing contracts 28
Kyrgyz Rep. 67
Resolving insolvency 71
Ukraine 83
Uzbekistan 87
Iran 118
Tajikistan 132
Out of 189 countries
04
Economicly Freedom Index
Economic freedom overall score: Armenia vs. CIS financial freedom
investment freedom
trade freedom
Economic Freedom Score: 67.0
monetary freedom
labor freedom
Economic Freedom Status: Moderately Free
business freedom
government…
Global Ranking: 54th
fiscal freedom
freedom from…
Regional Ranking in Europe: 23rd
property rights
overall score
CIS Ranking: 1st
CIS Average Armenia
80
70
47 52 53 53 54 58 59 60 61 61 63 63 65 66 67 67 67 67 69 71 73 73
60
50
40
30
20
10
-
Ukraine Russia Tajikstan China Greece Moldova Bosnia &Herzegovina Serbia Azerbaijan Kyrgyz Rep. Turkey Kazakhstan Montenegro Albania Romania Bugaria Macedonia Armenia Poland Israel ech Republic Georgia
z
C
05
Armenian Banking System – Main Features
20 commercial banks, 541 branches
Developing financial sector with adequate technological tools
- Internet and Mobile Banking, e-Commerce
- Good network of ATM-s and POS-terminals
Unified regulatory system (Central Bank) with professional and trained staff
Proven cooperation with international financial organizations, such as EBRD, IFC , ADB, EIB, IMF, WB, KfW
National payment system - ARCA
ACRA central credit bureau - over 90% of data on banks and credit organizations
Well functioning legislative and procedural framework protecting investors rights
Well developed corporate bonds market:
- Beneficial taxation regime: Individuals - residents/non residents -10%, Institutions - residents-10%, non residents-20%
- Central Depository system, safeguarding ownership title
- Secondary Market operating on Nasdaq OMX Armenia platform
55% of EBRD investment portfolio is in financial sector
06
AArrmmeenniiaann BBaannkkiinngg SSeeccttoorr BBaacckkggrroouunndd
As of 31.12.2015
Revenue /USD Assets (Banking) /USD Assets to GDP (Banking) Employees
385.533 mln 3.548 mln 70.3% 11473/0.92
of workforce (2015)
Percent of GDP Equity (Banking) /USD Loans to GDP (Banking) Number of Banks
4.2% 561.952 mln 43.2% 20
Key Trends – Growth Rates (2008 to 2015)
Total Bank Assets Total Bank Equity Total Bank Loans
346% 236% 344%
Source: CB RA
07
Armenian Banking Sector Background
AMD mln
5.000.000
4.500.000
GDP
4.000.000
3.500.000
3.000.000 Assets
2.500.000
2.000.000
Loans
1.500.000
1.000.000
500.000 Deposits
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
In 2015 the share of loans in total assets was 62%, almost twice the amount in 2003
Since 2003 assets and loans had a CAGR of 23% and 29% respectively
By 2015 RA banking system assets increased to USD 7.3 bln (by 16%)
By 2015 the deposits/loan portfolio ratio was 88%
Source: CB RA
08
Unibank at a glance
Unibank was founded First bank in RA listed Total Equity
in 2001 its shares through an IPO at USD 47.2 mln
Nasdaq OMX
(Licence N81, 09.10.2001
Central Bank of Armenia) Armenia
Structured branch network - Over
Moody's Investors Service rating
300000 Top 100
key regional coverage
Outlook
45
Stable
customers taxpayers list
branches
Full scale banking services:Retail, Corporate and Private Banking,
International and Domestic transfers, Cards, Internet Banking