YEREVAN, March 12. / ARKA /. VTB Bank (Armenia) plans to raise its total capital in summer to meet Central Bank’s new requirement, the bank’s CEO Yuri Gusev said in an interview with local ‘Golos Armenii’ (Voice of Armenia) newspaper. He said a decision to this end had already been made by the bank’s shareholder.
Earlier this year Armenia’s Central Bank decided to raise the minimum amount of commercial banks’ total capital to 30 billion drams from the current 5 billion drams from January 1, 2017. The regulator said the measure is aimed at encouraging mergers and consolidation of banks, which is expected to create a sound competitive environment and make banking services more available. The regulator said also it expects this measure to increase the flexibility and the ability of the banking system to withstand shocks in different economic situations, and help advance financial intermediation.
According to VTB Bank (Armenia) CEO, ‘competition is a good thing, however an increase in total capital does not give a bank a competitive advantage.’
“We need to invest in technology, the staff, business development strategy and banking tools and this is more complicated than just raising capital. Banks have become more technologically advanced,” Gusev said.
VTB Bank (Armenia) is a 100% subsidiary of Russian VTB Bank. It runs 67 branch offices throughout Armenia, more than any other local bank.
The bank’s assets in late 2014 stood at 379.6 billion drams (a 25.6% year-on-year increase); its liabilities were worth 334.8 bln drams (26.3% growth), total capital stood at 44.7 bln drams (20.2% growth), loan investments – about 244.3 bln drams (11.6% increase). The 2014 profit of the bank amounted to 777.14 mln drams, as compared to 5.6 bln drams in 2013. ($1 – 479.54 drams)..-0-
