Tuesday, August 23 2011 17:25
In Jan-June 2011 ROE of the banking system of Armenia made up 6.35%, ROA made up 1.24%
ArmInfo. In Jan-June 2011 ROE of the banking system of Armenia made up 6.35% - 0.97% more than in Jan-June 2010. ROA made up 1.24% - 0.11% more than a year before. As compared with 2009 ROE grew by 4.48%, ROA - by 0.84%.
According to ArmInfo's Ranking of Commercial Banks of Armenia, the growth in the indices was due to fourfold increase in the positive foreign exchange revaluation balance of 7 banks. Even though 14 banks still had negative balance during the period but it was 3 times less negative than in 2010 and 23 times less negative than in 2009, when the balance was very negative due to AMD's depreciation and the global crisis. The foreign exchange revaluation balance of the whole banking system is still negative but it is 6 times less negative than in 2010 and 54 times less negative than in 2009. ROE and ROA are based on the average daily balance sheet ratio between total assets/total capital and retained profit (see pages 8 and 63).
The top five in ROE (with Mellat Bank exclusive) are VTB Bank Armenia - 10.91%, HSBC Bank Armenia - 10.35%, Afrtsakhbank - 9.93%, ARARATBANK - 9.92% and INECOBANK - 9.28%. The leaders in ROA (with Mellat Bank exclusive) are BTA Bank - 3.63%, INECOBANK - 1.87%, VTB Bank Armenia - 1.82%, HSBC Bank Armenia - 1.80% and ACBA-Credit Agricole Bank - 1.72%. The 1st in ROE is VTB Bank Armenia, while the 1st in ROA is BTA Bank.
The aggregate total capital of Armenia's commercial banks grew by 15.8% as compared with Jan-June 2010 and by 6.7% in Jan-June 2011 to 352.5bln AMD or $955.5mln. The aggregate assets grew by 28.7% as compared with Jan-June 2010 and by 12.5% in jan-June 2011 to 1.8trl AQMD or $4.8bln. The aggregate retained profit by 39.3% in Jan-June 2011 to 21.2bln AMD or $57.6mln.
The top five in total capital are ACBA-Credit Agricole Bank - 42.1bln AMD, Ameriabank - 32.3bln AMD, Ardshininvestbank - 31.1bln AMD, VTB Bank Armenia - 28.6bln AMD and HSBC Bank Armenia - 27.2bln AMD. The top five in assets are ACBA-Credit Agricole Bank - 192.7bln AMD, Ameriabank - 177.4bln AMD, HSBC Bank Armenia - 155.2bln AMD, VTB Bank Armenia - 151.9bln AMD and Armbusinessbank - 143.7bln AMD. The top five in retained profit (with Mellat Bank exclusive - 1.6bln AMD, sixfold growth) are ACBA-Credit Agricole Bank - 3bln AMD, HSBC Bank Armenia - 2.8bln AMD, VTB Bank Armenia - 2.6bln AMD, Ardshininvestbank - 1.9bln AMD and Ameriabank - 1.6bln AMD.
Mellat Bank is not in the top five in ROE and ROA because of its "artificial race" for the leadership and presumably political motives for being present in Armenia's banking system. The reason why Mellat Bank is the first in ROA and ROE is that its net profit grew much more significantly than the assets and total capital did. The assets increased due to growing nostro accounts (presumably, at the mother bank) while the loans decreased (disregarding the big loan to the mother bank). The bank increased its total capital by repaying its corporate time deposits, reducing personal time deposits and call deposits and thereby enlarging its profit. Hence,
To note, ROE and ROA for Mellat Bank and ProCredit Bank are based on the total capital and assets figures published in their balance sheets as both banks refused to provide average daily figures. Mellat Bank set unreasonable requirements with a view to artificially raise its position in Armenia's banking system while ProCredit Bank explained that it does not calculate its average total capital and assets on a daily basis because of transiting to IFRS standards.
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