Mon, 11 August
27.1 C
Yerevan
USD: 384.03 RUB: 4.80 EUR: 443.29 GEL: 142.29 GBP: 510.11

CIS banks’ credit profiles hurt by weak corporate governance, while in Armenia this is less noticeable – Moody’s

YEREVAN, March 19. /ARKA/. Banks in the Commonwealth of Independent States generally have weaker corporate governance than peers in other regions and this is harming their credit profiles, Moody’s Investors Service says in a report published yesterday.

According to Moody’s, of the Commonwealth’s 101, 18 banks with BCA show negative corrections on corporate behavior.

These 18 banks mostly have quite low BCA – from caa2 to b2. Of these banks 16 are located in Russia, one is located in Armenia and one in Azerbaijan.

“Fraud and financial weaknesses caused by poor governance have caused some banks to close,” said Svetlana Pavlova, Assistant Vice President-Analyst at Moody’s. “Key-person and related-party risks are greater in the CIS than elsewhere.”

Regulators in the CIS have withdrawn some banks’ licences because of fraud and losses caused by large related-party exposures and weak risk management. Regulators in some CIS countries have been taking steps to tighten supervision, improve reporting or reduce related-party lending.

Key-person risks arise from heavy dependence on single individuals for business, which often indicates weak corporate governance and lax underwriting standards. Related-party loans on average equal about 50% of tangible common equity and 8% of total loans at CIS banks.

The withdrawal of licenses along with adverse economic conditions led to the decrease of the number of banks in the majority of CIS member countries.

Moody’s also said that the factor of week corporate management in banks’ bankruptcy was less noticeable, and the number of banks here shrank because of mergers.

After the Central Bank of Armenia increased its requirement to banks, demanding to build up their authorized capital, some banks merged. Only 17 remained of the previous 21 commercial banks. The merging process lasted from 2014 to 2017. -0—

spot_img

POPULAR

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.

Armenia’s state budget had a deficit of 39.2 billion drams in the first half of the year, according to the Finance Ministry.

The Armenian government’s budget for the first half of the year was executed with a deficit of 39.2 billion drams, which is significantly lower than the projected deficit of 325.3 billion drams, according to a statement released by the Ministry of Finance today.

Armenian bank sees HSBC Malta takeover as gateway to Europe

Ardshinbank has submitted an offer to acquire HSBC Malta, David Sargsyan, deputy chairman of the Armenian bank, told the Times of Malta.

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.

Moody’s upgrades Converse Bank’s ratings

Moody's Ratings has upgraded Converse Bank CJSC's long-term local and foreign currency bank deposit ratings to Ba3 from B1, aligning the Bank’s rating with Armenia’s sovereign rating.

LATEST NEWS

spot_imgspot_imgspot_img