For international banks, operating in the South Caucasus region has become extremely risky and costly due to local and global challenges. This was stated by the Governor of the Central Bank of Armenia, Martin Galstyan, during a press conference on July 30, focused on the refinancing rate.
Responding to journalists' questions about the recent withdrawal of HSBC from the Armenian market and the absence of a "global player" in the banking sector, Galstyan noted that the trend of global banks leaving is not unique to Armenia but is characteristic of the entire South Caucasus region. He highlighted several key reasons for this phenomenon, including local and global risks.
"After the collapse of the USSR, the region was seen as a promising area for expansion, but this perspective has changed. Violations of U.S. sanctions laws result in severe fines. This makes operating in the region extremely risky and costly for global banks," he said.
According to the Central Bank Governor, the global trend shows that banking systems are becoming more localized. Operating in small economies, such as those in the South Caucasus, often does not justify the high operational costs for global banks. Additionally, instability in the region and potential conflicts deter large international players.
Earlier, BMG reported that on June 12, the Armenian Competition Protection Commission approved the acquisition deal between Ardshinbank and HSBC Bank Armenia. As a result, Ardshinbank is purchasing HSBC Bank Armenia, which had previously announced its exit from the Armenian market.
The Commission stated that this deal would not reduce competition and would not harm consumer interests. The parties agreed that Ardshinbank would acquire 100% of the shares of HSBC Bank Armenia, owned by HSBC Europe BV.
