YEREVAN, May 18. /ARKA/. Last week’s agenda included issues of credit institution sustainability, public debt structure, capital market development, and digital financial services. Special attention was paid to SME access to bank financing, Open Banking, and insurance technologies.
1. Credit Institutions: Sector Net Profit Decreases to AMD 8.4 Billion
The total net profit of Armenia’s credit institutions for the first quarter of 2026 amounted to AMD 8.44 billion, compared to AMD 18.44 billion for the same period in 2025, a decrease of 2.18 times, or 54.2%, according to ARKA’s “Credit Institutions of Armenia (Key Performance Indicators)” bulletin. Q1 2026″, with assets growing to AMD 882.39 billion and equity to AMD 458.03 billion, the decline in profit reflects a shift in the sector’s profitability amid rising balance sheet indicators.
In practice, this may increase the importance of monitoring operational efficiency, loan portfolio quality, and funding costs.
2. Public Debt: Armenia’s Total Debt Exceeds $14 Billion
Armenia’s total public debt as of March 31, 2026, amounted to $14,077.138 million, a decrease of $57.761 million compared to February 28. According to official statistics released last week, $14,068.954 million of the total debt was government debt, while $8.184 million was community debt.
The debt structure remains a benchmark for banks, investment companies, and institutional investors. For the capital market, domestic government instruments can form a benchmark yield curve and be used as a benchmark when valuing other debt securities.
3. Capital Markets: EBRD notes Armenia’s progress in using complex financial instruments
Elisabetta Falcetti, EBRD Managing Director for Turkey and the Caucasus, told ARKA news agency that Armenia is demonstrating significant progress and growing readiness to use more complex financial instruments. She noted the dynamics in green finance, green housing projects, sustainable infrastructure programs, as well as capital market reforms and companies’ preparation for issuing bonds and shares.
For issuers, this could mean a wider range of financing instruments, while for investors, it could mean expanded opportunities to work with debt, equity, and structured instruments.
4. Foreign Exchange Market: Euro and Dollar Declined Against the Dram, Ruble Gains
From May 11-15, according to the Central Bank of Armenia, the average market exchange rate of the US dollar to the Armenian dram showed mixed dynamics within the range of 368.96 – 368.23 drams; The euro exchange rate fell from 434.23 drams to 428.95 drams; the Russian ruble exchange rate rose to 5.0312 drams.
Thus, fluctuations in major currencies throughout the week remained moderate but mixed. This may continue to require businesses to consider exchange rate parameters in short-term financial planning and settlements with counterparties.
5. Capital Markets: AMX conducted government bond transactions worth 35 billion drams.
On May 12, the Armenia Stock Exchange held auctions to place government bonds worth 30 billion drams and repurchase government bonds worth 5 billion drams. The placement of five-year bonds had an annual coupon yield of 7.6%. Repurchase transactions were also conducted for three-year and five-year government bonds worth 3 billion and 2 billion drams, respectively, with annual coupon yields of 8.4% and 9.4%. Activity on the AMX could support the circulation of government securities and expand the range of tools for portfolio management.
6. Payments and Fintech: The Central Bank outlines the rationale for implementing Open Banking
Armenian Central Bank Chairman Martin Galstyan stated on May 12 that the implementation of Open Banking in the country is aimed at expanding consumer opportunities in their relationships with financial institutions. According to him, the key idea of the model is that the client owns their financial data and decides who to grant access to. Localization of the EU PSD2 directive is also being discussed in Armenia.
The development of Open Banking could shift some of the competition to the quality of service, transparency of terms, and convenience of digital solutions, which for the financial market could mean further institutionalization of digital infrastructure and increased importance of data regulation.
7. Insurance and Compliance: The Armenian Bureau of Motor Insurers and GAIP Sign Agreement
On May 11, the Armenian Bureau of Motor Insurers and the international organization Global Association of InsurTech Professionals signed a cooperation agreement in the field of compulsory motor vehicle liability insurance and insurance technologies. The use of digital solutions in compulsory motor third-party liability insurance (CMTPLI) and insurance processes can have implications for claims handling, customer service, and data management.
8. SMEs and Lending: The Central Bank, the Ministry of Economy, and the World Bank Discuss Guarantee Mechanisms
Central Bank Governor Martin Galstyan announced on May 12 that the Central Bank, together with the Ministry of Economy and partners from the World Bank, is discussing a mechanism for partial guarantees for small and micro businesses through a special guarantee fund. According to the regulator’s head, the Central Bank has initiated a program under which interest rates on loans for companies with good credit and tax histories are reduced by 1-1.5% on new and existing loans.
A set of measures around SMEs could create a more targeted approach to lending to companies with varying levels of risk and financial discipline.
Weekly Summary
The financial agenda for the week focused on the dynamics of credit institutions’ indicators, government debt, government bond transactions, the development of Open Banking, SME support measures, and insurance technologies. For banks, investors, and regulators, the week marked a work agenda related to risk management, liquidity, SME access to financing, and the further development of financial infrastructure.
