Month: May 2008

ROSGOSSTRAKH-ARMENIA COMPANY GRANRED NONLIFE INSURANCE LICENCE

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. At the May 20 sitting of the Central Bank
of Armenia (CBA) Board, which was conducted by the CBA deputy chairman
Artur Javadian, a decision was made to register Rosgosstrakh-Armenia
company and grant it a licence for nonlife insurance of the following
types: accident insurance, cargo insurance, overland transport
insurance (except for railway), fire and natural disaster insurance,
insurance of other damage to property, insurance of responsibility
for the use of overland transport means, insurance of overall
responsibility.

According to a press release of the CBA, the CBA Board approved
the execution of the 2007 annual program and the 2008 1st quarterly
program on expenditure budgets and capital investments of the CBA,
as well as the CBA’s financial report for 1st quarter, 2008.

By the CBA Board’s decision, Depi Tun LLC was provided permission
for participation in Faster and Blizko payment and account systems,
MG Pay System CJSC was granted a licence for money transfers, and
Mitra Insurance and Reinsurance Broker LLC – a licence for insurance
brokerage.

HSBC BANK ARMENIA TO JOIN "ARCA" PROCESSING SYSTEM THIS YEAR

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. HSBC Bank Armenia will join the Armenian
Card (ArCA) processing system by the 4th quarter of 2008, which will
create an opportunity to receive money from cash machines of HSBC Bank
Armenia by using ArCa plastic cards of other banks – at the rates of
ArCa system’s participant banks. ArCa cards are currently serviced
by the cash machines of HSBC Bank Armenia but at the higher rates of
HSBC Holding international bank group. The CEO of HSBC Bank Armenia
Tim Slater said this at the May 20 press conference.

According to him, the bank now considers the possibility of installing
cash-in machines.

Speaking about crediting programs of HSBC Bank Armenia, T. Slater
said that the total amount of crediting by the bank will make about
270 mln USD in late 2008, including mortgage credits of 80 mln USD
(55 mln USD in late 2007) and car credits of about 16 mln USD (13.5
mln USD in late 2007).

In the words of T. Slater, a growth in interest rates has been
observed now in the Armenian market of banking services, there is
great demand for credits. On the other hand, the growth in interest
rates of deposits has slowed down, while the refinancing interest
rate of the Central Bank of Armenia (CBA) has increased from 4%
to 6.75% in recent years. He said that under such conditions, many
banks have suspended provision of mortgage credits, whereas HSBC Bank
Armenia continues to provide this service: mortgage crediting is done
at 11% interest rate (in drams) and 14% interest rate (in dollars)
for a period of 15 years. The possibility of increasing the repayment
period to 20 years is now being considered.

It was stated that the bank together with the European Bank for
Reconstruction and Development (EBRD) and the International Finance
Corporation (IFC) is discussing the possibility of providing joint
(syndicate) commercial credits in Armenia.

T. Slater said that this year the bank’s indices are also in line
with the programmed ones: in January-April 2008, its after-tax profit
made 3.8 mln USD, growing by 27% as compared with the same period of
last year.

NATIONAL SERVICE CENTER OF HSBC BANK ARMENIA TO OPEN IN LATE MAY

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. National Service Center of HSBC Bank
Armenia CJSC will open in Yerevan in late May. The center will
fulfil many of the functions currently carried out by the head
office of the bank, the bank’s CEO Tim Slater stated at the May 20
press conference. The center will be located at the bank’s branch in
Komitas Avenue.

In the words of HSBC Bank Armenia’s deputy CEO Irina Seylanian, the
funcion of document registration of services provided to customers
will be transferred from the branches to the center, thanks to which
the employees of the branches will have more time to provide practical
services to customers.

According to the financial director of the bank Gevorg Tarumian, the
processing function and the necessary computer equipment (servers)
will also be transferred to the service center. Thanks to the center’s
operation, the time spent on opening an account in HSBC Bank Armenia
will be reduced by 15 minutes.

T. Slater informed those present that three branches will open in
Yerevan in 2008, while next year the bank will start opening its
branches outside Yerevan. The bank currently has 10 branches, 4 of
which started functioning in 2007.

ZVARTNOTS AIRPORT SERVICES MORE THAN 372 THOUSAND PASSENGERS IN FIRST FOUR MONTHS OF 2008

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. Zvartnots International Airport serviced
372,179 passengers in the first 4 months of 2008, which is more by
41,861 passengers than in the same period of 2007. In the indicated
period, 218,233 passengers departed from Zvartnots, and 153,946 ones
arrived – as compared with 186,913 and 143,405 passengers respectively
in January-April 2007.

NT correspondent was informed by spokeswoman for the Main Department
of the RA Civil Aviation Gayane Davtian that cargo transportation
made 2,709 tons in January-April 2008, growing by 82 tons on the same
months of 2007.

The number of take off-landings at Zvartnots Airport made 2,566 in
the indicated period, increasing by 316 on the same period of 2007.

Shirak Airport of Gyumri services 6,319 passengers, while cargo
transportation made 2 tons in January-April 2008, which is fewer
by 5,267 passengers and less by 2.7 tons as compared with the same
period of 2007.

GDP OF ARMENIA GROWS BY 9.3% IN JANUARY-APRIL 2008 ON SAME MONTHS OF 2007

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. Armenia’s GDP grew by 9.3% in
January-April 2008 on the same period of 2007 and made 696 bln 104.7
mln drams (about 2 bln 257.9 mln USD). The GDP index-deflator made
106.8%.

According to the RA National Statistical Service, industrial production
grew by 0.1% in Armenia in January-April 2008 on the same months of
2007 and made 226 bln 590.6 mln drams.

The gross agricultural output increased by 1.3% to 64 bln 164.5
mln drams, construction – by 16.8% to 71 bln 132.9 mln drams, retail
trade – by 3.5% to 253 bln 592.1 mln drams, and services grew by 11.2%
to 171 bln 740.8 mln drams.

Armenia’s foreign trade grew by 28.3% as compared with January-April
of last year and made 1 bln 531.4 mln USD, with exports growing by 4.4%
to 337.2 mln USD, imports – by 37.2% to 1 bln 194.2 mln USD.

Consumer prices rose by 8.6%, industrial production prices – by 3.1%
in January-April 2008 on January-April 2007.

The number of officially registered unemployed persons declined
by 11.6% in late April 2008 on the same date of 2007 and made 76.3
thousand.

The average monthly nominal salary made 85.72 thousand drams in the
first four months of 2008 (22.3% growth on the same period of last
year), including the salary of employees of budgetary institutions
– 61.101 thousand drams (17.8% growth) and that of employees of
nonbudgetary institutions – 107.293 thousand drams (23% growth). The
average exchange rate of a US dollar made 308.3 drams in January-April
2008. The same index in 2007 made 342.08 drams.

ASSETS OF HSBC BANK ARMENIA GROW BY 30% TO ABOUT 337.4 MILLION DOLLARS IN 2007

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. The results registered by HSBC Bank
Armenia in 2007 were notable in terms of increased investments and
the improved quality of services provided to customers, the bank’s
CEO Tim Slater stated at the May 20 press conference.

In his words, last year the assets of the bank grew by 30% and made
104 bln drams (about 337.4 mln USD), and by this index the bank took a
leading position among the 22 commercial banks of Armenia. 70% increase
of crediting contributed to the indicated growth. The revenues of HSBC
Bank Armenia grew by 24% in 2007 and amounted to 9.16 bln drams in late
2007, while the after-tax profit grew by 5.4% and made 3.3 bln drams.

T. Slater explained a small growth of the profit as compared with
the revenues by the large amount of investments made by the bank in
2007. In particular, invetsments were made for opening a new head
office in Yerevan and 4 branches of HSBC Bank Armenia. The bank’s
shareholders reinvested the sums to be received as dividents.

A large – 32% share of HSBC Bank Armenia in the Armenian mortgage
market bears evidence of a high quality of services provided by
the bank to its customers, while the bank’s share in the deposit
attraction market grew to 26%. According to T. Slater, among the bank’s
customers are about 40 thousand natural persons and 3.6 thousand legal
entities. The staff of the bank increased by 78% to 339 people in 2007.

T. Slater added that the tendencies to the improvement of the bank’s
economic indices and customer services and the growth of investments
will continue in 2008. It is planned to open 3 branches in 2008, the
bank’s national service center (in May), to launch the provision of
Internet banking services (by late 2008). In late May the bank will
also increase the duration of its daily work.

T. Slater announced the 2007 results of HSBC Bank Group in 84
countries: the revenues grew by 24% to 87.6 bln USD, while the pre-tax
profit grew by a record 16% to 24.2 bln USD.

NATIONAL ASSEMBLY STARTS DISCUSSION OF ANNUAL REPORT ON EXECUTION OF 2007 STATE BUDGET

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. The RA National Assembly on May 20
started discussion of the annual report on execution of the 2007
state budget.

According to the deputy minister of finance, chief treasurer of the
RA Atom Janjughazian, 13.8% economic growth was registered in 2007,
which exceeds by 4.8% the programmed index. Per capita GDP made 975,907
drams in nominal expression, growing by 18% as compared with 2006.

The level of unemployment declined by about 0.4% on the previous year
and made 7.1%. The number of the unemployed made 82,800 in 2007. The
annual incomes of the population increased by 25.7% as compared with
2006, the average salary grew by 21.2% and made 77,469 drams.

The nominal settlement exchange rate of the Armenian dram against
the US dollar made 304.1 drams in December 2007, increasing by 16.6%
as compared with December of the previous year. According to customs
statistics, the foreign trade of Armenia amounted to 4.439 billion
dollars, growing by 39.7% on 2006. In 2007, exports grew by 17.5%,
imports – by 40.7%.

TIGRAN SARGSIAN: 2007 WAS QUITE SUCCESSFUL IN TERMS OF MACROECONOMIC INDICES

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. A people, whose sons are not equal
before the law and death, will not have a victorious homeland, –
with these words of Garegin Nzhdeh the Armenian prime minister Tigran
Sargsian started his annual report on the 2007 state budget at the May
20 sitting of the RA National Assembly. He explained that beginning
his speech with the above mentioned expression is conditioned by the
fact that the number 1 problem of the government is to create equal
tax conditions, which is the only way to victory.

According to him, in this respect 2007 was an exceptional year as it
was for the first time that the government succeeded in increasing
sharply the tax collection. The state budgetary revenues grew by 33%,
with the taxes/GDP ratio growing by 1.6%. T. Sargsian underlined
that this is an unprecedented growth for Armenia because in 2006 the
same index made only 0.2%. He said that the government realizes that
the progress made in 2007 is still insufficient as serious problems
in terms of improving the tax and customs administration have been
revealed. In particular, in 2007 it was revealed that considerable part
of taxes was collected in the form of indirect taxes and the share
of direct taxes in the total amount of taxes declined as compared
with 2006. Like in the previous years, in 2007 imports grew rapidly,
which allowed to increase budgetary revenues at the expense of VAT
charged on the border.

T. Sargsian said that the 2007 macroeconomic indices were quite
impressive and at the same time obliging as a 13.8% GDP growth was
registered in 2007 and the government finished the year with 6.6%
inflation. In his words, when comparing Armenia with other CIS
countries, it can be stated that 2007 was quite successful in terms
of macroeconomic indices, which puts serious tasks for the government:
to ensure the tendencies achieved.

NEYCHO VELICHKOV APPOINTED DIRECTOR GENERAL OF ARMENTEL CJSC

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. VimplelCom OJSC has announced the
appointment of Neycho Velichkov as director general of ArmenTEl CJSC
– VimpelCom’s subsidiary providing communication services under the
Beeline brand in the territory of Armenia.

"ArmenTel is an important component of our business and a decisive
element in VimpelCom’s development strategy in other countries,"
VimpelCom’s deputy executive chairman for business development
in CIS countries Dmitry Pleskonos stated. According to him, they
have licences for all types of communication in Armenia, and in the
selection of a director general, "the comprehensive and successful
managerial experience of Neycho Velichkov" was taken into account. "I
am sure that his knowledge will help the company to efficiently
deal with its problems on the introduction of advanced communication
technologies and ensure a leading position in the sector of services,"
D. Pleskonos said.

Commenting on his appointment, N. Velichkov said: "Our major goal
today is to develop the Beeline brand in Armenia, provide services
based on the 3rd generation network and convergent services, as well
as to improve the quality of communication and services. By achieving
success in these directions, we will win popularity with Armenia’s
population and become a leading servicing company in the country".

Neycho Velichkov was born on September 27, 1961, in Sofia
(Bulgaria). He received higher education in Russia where he graduated
from the Moscow State Institute of International Relations in 1990. In
2001 he earned a MBA degree of Seattle University, in 2007 he received
a management and leadership diploma of the Massachusetts Technological
Institute. He has worked in the telecommunication sphere since 2000. He
was a person in charge of corporate sale at Bulgaria’s biggest GSM
operator – MobilTel and was responsible for the company’s marketing
and sale of complex solutions that combine fixed, mobile and IP phone
communication possibilities. In the past 3 years, he headed sales
and marketing of Bulgaria’s biggest fixed communication operator –
Bulgarian Telecommunication Company (BTC) where he participated in the
launching and promotion of BTC’s subsidiary – a mobile communication
operator in the Bulgarian market.

Prior to entering the telecommunication business, N. Velichkov had
his own company providing advisory services on business creation and
development in Russia and EU countries.

Among his achievements is successful introduction of new communication
services in the market (convergent services and solution, GSM Gateway,
VoIP solutions, GSM POS terminals, and mobile VNP).

RULES OF PROVISION AND USE OF PHONE SERVICES APPROVED

Noyan Tapan

Ma y 20, 2008

YEREVAN, MAY 20, NOYAN TAPAN. At the May 20 sitting, the RA Public
Services Regulatory Commission approved the rules of provision and
use of phone services. The current rules were approved as long ago
as 1998. The commission chairman Robert Nazarian told reporters that
the new rules will regulate the relations between the providers and
users of the services.

Besides, the new rules qualitatively differ from the current ones
as they specify the obligations of the consumer and the provider of
services. In particular, in case of disconnection of the user’s phone,
the user has the opportunity to call on the phone numbers of rapid
response services, including 02 and 03. The issue of prepaid cards will
be clarified within the next two days. ArmenTel proposes not returning
the sum that remains on prepaid cards, whereas the commission claims
that the consumer is not obliged to pay for unused minutes.

R. Nazarian said that the previous rules were related to a
service-providing company with a monopoly position, whereas now the
market has been liberalized and made competitive, which prompted
the commission to revise the rules. Besides, according to him, the
telecommunication sector is rapidly developing and it is not ruled out
that a necessity to amend the rules will arise in the next six months.

In the period from the decision’s coming into force to July 1, 2009,
the agreements on phone services provision signed with ArmeTel’s
subscribers shall be brought into line with the new rules.