Freedom eyes Armenia bank deal, France license

Photo: Dina Karamchakova, photo editor: Dastan Shanay

According to Freedom Holding Corp. (FRHC) partner Vladimir Pochekuev, who also serves as chairman of the board of directors of Freedom Broker Global Markets (UAE) and Freedom Yatirim (Turkey), FRHC is considering acquiring a bank in Armenia. The key obstacle to this move is the relatively high cost of financial institutions in the country.

«Let me be clear. We’re not trying to solve this problem at any cost. The Armenian regulator currently does not see a path to issuing new banking licenses. As a result, the cost of these licenses on the secondary market is quite high. In addition, regulatory capital requirements for banks in Armenia are relatively high — at least $80 million,» he said during the Freedom Inside forum.

As he noted, banks are significantly cheaper in Europe, so Freedom is exploring potential opportunities in the EU.

«In Europe, €5 to €10 million is sufficient in many cases. In Armenia, even the least expensive banks are valued well above $100 million, which is a substantial amount for a relatively small economy. Therefore, we will continue working with the regulator and searching for a target bank to acquire,» he said, adding that the company is already among the top 50 taxpayers in Armenia.

To expand its global operations, FRHC is also exploring the possibility of acquiring a bank in France, said Freedom Finance Europe Executive Director Evgeniy Tyapkin.

«We want to move beyond a traditional brokerage model. We see the next stage of growth in Europe not just as developing brokerage services, but as expanding the entire client ecosystem around them. In this context, we are focusing on several areas, primarily banking services,» he said.

Tyapkin believes that banking services complement the brokerage business well.

«To that end, we are actively evaluating the possibility of applying for a banking license in France. The French government selected Freedom to participate in its annual meeting with foreign investors this June and has supported us in every way over the past six months,» he said.

Freedom Finance operates in Lithuania, Poland, Germany, the Netherlands, France, Spain, Italy, Greece and Bulgaria, with its European headquarters in Cyprus. According to Tyapkin, the company has teams of local specialists in each of these countries who sell Freedom’s products in local languages. The company is now planning to expand its brokerage business into Portugal, the Czech Republic, Hungary and Romania, which are viewed as potential growth markets for FRHC in the coming years.

In Cyprus, a country with very strict regulatory requirements for financial market participants, the company is the leading broker and the largest taxpayer in the financial sector. Freedom also plans to soon offer European clients investment advice based on their risk profiles, current transactions and investment portfolios.

Last year, Freedom Finance Europe reported $368.9 million in net commission income, up significantly from $190.4 million in 2023, along with $252.7 million in net profit. In 2023, net profit was roughly half that amount, at $120.7 million.