Wed, 1 October
15.1 C
Yerevan
USD: 382.52 RUB: 4.64 EUR: 449.38 GEL: 140.57 GBP: 514.03

Fitch: Armenian banks have stronger capital buffers, growth prospects moderate

YEREVAN, April 20. /ARKA/. Fitch Ratings said Armenian banks have strengthened capital buffers following recapitalization during 2015-2016. However, prospects for growth remain moderate as credit demand is yet to recover along with improving macro trends.

The recapitalization process has triggered M&A activity and sector consolidation, which we think is likely to continue over 2017 as competition in the market intensifies. The sector structure has changed moderately, with the top 10 banks gaining market share, due to both M&A activity and rapid expansion by some domestically-owned banks in 4Q16. However, the latter was largely driven by operations with non-residents rather than financing of domestic growth, and we expect new lending to remain moderate in 2017.

Achieving improvements in profitability remains a challenge and will likely depend on loan growth and stabilization in asset quality metrics. The stock of problem assets decreased in 4Q16, in part due to balance-sheet clean-up activity accompanying recent M&A deals. Borrower performance remains highly sensitive to recovery in domestic demand and stability of the dram, as lending dollarization remains high.

In late 2014, Armenia’s Central Bank decided to raise the minimum amount of the total capital of commercial banks from 1 January 2017 to 30 billion drams instead of 5 billion drams. The decision prompted mergers and acquisitions. As a result, out of 21 banks there remain now 17. ($ 1 – 486.09 drams). -0-

spot_img

POPULAR

Armenia’s state budget deficit planned to be reduced to 1% by 2030, according to Finance Minister

Armenia's state budget deficit is planned to be reduced to 1% by 2030, announced Finance Minister Vahe Hovhannisyan.

Ranking of the most profitable banks in Armenia based on results of second quarter of 2025

ARKA news agency publishes the ranking of the most profitable commercial banks in Armenia based on the results of the second quarter of 2025.

Net loan portfolio of Armenian banks in Q2 2025 increased by 6.11% to AMD 6.8 trillion

The combined loan portfolio of 17 Armenia-based commercial banks upped  by 6.11% in Q2 2025 compared to Q1 2025, amounting to AMD 6.82 trillion, according to a ranking compiled by  the ARKA news agency.

Ranking of most profitable banks in Armenia based on results of first quarter of 2025

ARKA news agency publishes the ranking of the most profitable commercial banks in Armenia based on the results of the first quarter of 2025.

LATEST NEWS

spot_imgspot_imgspot_img