Armenia's second largest lender, Ardshinbank, merged with the local subsidiary of Russia's Gazprombank, on October 11, the banks announced in a joint press release. The merged bank will become Armenia's largest lender, with capital worth AMD74bn (€141.1mn) and assets worth AMD540bn, the statement added.

The merger took place after a Russia-based corporation called Region purchased Areximbank-Gazprombank on October 7. Region and Ardshinbank have the same majority shareholder, Russian businessman of Armenian origin Karen Safaryan. Gazprombank did not indicate why it had decided to divest its Armenian assets. However, the merger with Ardshinbank will help the lender escape the Western sanctions exacted on its Russian mother company, particularly when it comes to servicing international clients.

The merged institution inherits 72 branches in Armenia and Ardshinbank's Paris office, as well as some AMD82bn in total capitalisation and AMD475bn in liabilities. Ardshinbank closed the first half-year with an AMD2.2bn profit, while the Armenian Gazprombank lost AMD183.4mn in the same period.

Areximbank-Gazprombank appeared to be struggling to meet legal capital requirements and to stay in the black.

In the joint statement, the banks indicated that they would provide financial services on the territory of Armenia and that of Nagorno-Karabakh, a mountainous region of some 140,000 inhabitants that Armenia disputes with neighbouring Azerbaijan and that is economically underdeveloped. 

Safaryan is well-known in Armenia for his business ventures in Russia. In the 1990s and early 2000s, the businessman served as an executive in a number of machinery and transport companies in Russia, including Rosaviaspetskomplekt, Tranzit and RASCO.