YEREVAN, August 24. /ARKA/. Armenia’s banking sector remains well capitalized and highly profitable, supported by high net interest income and robust economic growth, according to a report from international rating agency S&P Global Ratings.
“Credit growth remains strong, driven primarily by consumer and mortgage lending, although tightening macroprudential measures and the gradual phasing out of mortgage tax breaks have begun to dampen housing demand, particularly in Yerevan,” the report states.
While rapid lending growth has led to increased private sector debt, the agency’s analysts view the associated risks as manageable at this stage, given banks’ substantial capital buffers, resilient asset quality, and expectations that profitability will remain high despite a gradual normalization of indicators following recent peaks. The agency notes that, as a precautionary measure, the central bank raised the countercyclical buffer by 0.25 percentage points in July; therefore, the new rate of 2.0% will come into effect in February 2027.
“The gradual de-dollarization of banks’ balance sheets has further reduced currency risks, and banks’ increasing attraction of funding from non-residents and international financial institutions is unlikely to lead to a significant deterioration in financing conditions. High geopolitical uncertainty remains the main risk for the banking sector,” the report emphasizes.
According to ARKA news agency data, “Performance Indicators of Armenian Banks. Operational Data for Q2 2026,” compiled based on Armenian banks’ IFRS reports, the total net profit of Armenian banks for the first half of 2026 amounted to 219.72 billion, an increase of 9.48%. The total assets of Armenian banks as of June 30, 2026 amounted to 13.84 trillion drams (annual growth of 19.15%); the volume of bank loan investments – 8.56 trillion drams (an increase of 23.56%); total liabilities – 11.61 trillion drams (an increase of 20.27%); the volume of total capital – 2.23 trillion drams (an increase of 13.63%).
