Haypost Trust Management - who are they?

Azg has a news item about the Armenian Postal Service management being handed over to a private entity from Holland. According to Azg, 'Haypost Trust Management' is a subsidiary of a company called 'PostFinance'. The deal is for a period of 5 years during which the Europeans promise to make capital investments and improve the services while not cutting down the number of the branches around Armenia. There are 900 postal branches in Armenia.



It would make little sense for a foreign company to make such promises - after all, Armenia only has some 2.5 million people, and serving these peoples' postal needs is not a very lucrative business. Another surprising detail was that the chief of the Central Bank of Armenia, Tigran Sargsian, was among the people signing the deal.



Well, it turns out that there is a plan to open a 'HayPostBank' as well. There is not much mentioned in the article about this but here is what I think the deal is all about.



PostFinance is a Swiss money transfer company. It is not a big secret that the reason that the Armenian economy stays afloat is the relatively large amount of money being wired to Armenia by the Armenian citizens working abroad. The estimated amount ranges from 4 to 6 billion USD annually. Right now there a a few ways of transferring this money - banks using SWIFT, small Armenian businesses accepting deposits abroad and delivering the money to the recipient in Armenia, and individuals visiting Armenia.



It seems like a lucrative business that PostFinance should be in. It would be difficult for it to enter this market without a local representation. So they have decided to take over HayPost. HayPost's finances are not made public but since it's a state operated business, it is bound to have quite a lot of inefficiences. Throughout the world, state owned enterprises are full of incompetent people. Armenia is not an exception - the whole governance structure is based on nepotism, not skill.



My guess is that PostFinance will trim a lot of the fat if they have received a 'license to kill' from the Armenian government. They will probably break even, or even make a little profit. But the real goal is to get a piece of the money transfer market which they will and that's where they'll make their return on investment.