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Consolidation of Armenia’s banks has enhanced system’s financial stability and liquidity – central bank

YEREVAN, May 25. /ARKA/. The consolidation of Armenia’s banks has enhanced the system’s financial stability and liquidity, Andranik Grigoryan, chief of the central bank’s division in charge of development of the country’s financial system, told journalists on Wednesday.

“Consolidation of banks and inflow of the capital had positive impacts on the country’s financial system and enhancement of its banking system’s stability significantly increasing its competitiveness and room for serving the economy for long period of time,” he said.

Four consolidations of banks were registered in 2016, he said, and thanks to that only 17 commercial banks remained in the country and their regulatory capital was built up a great deal.

The banks’ aggregate capital grew 38.6%, compared with late 2014.

Grigoryan said referring to results of stress tests that the banking sector’s ability to ward off future risks has enhanced.

Speaking about the normative indicator of banks’ capital adequacy, he said it rose 3.8 percentage points to 20% by the end of the year, and normative indicators of general and current liquidity grew 4.5% and 28.4% to 32.5% and 170.8% respectively.

Grigoryan also said that the share of nonperforming assets in the banking sector shrank as well, and thanks to that, it ended the year in an AMD 32-billion profit.

In late 2014, the central bank raised its requirement to the size of commercial banks’ capital from AMD 5 billion to AMD 30 billion prompting mergers and consolidations.

As a result, of 21 banks only 17 remain in the country. ($1 – AMD 482.13). –0—-

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