Tuesday, August 30 2011 14:06
Armenia's banking system increases its obligations by more than 32% thanks to attraction of time deposits and international credits
Arminfo. The total obligations of Armenia's banking system grew by 14% in Jan-June 2011, by 7% in Q2 2011 alone and by 32.3% as compared with Q2 2010 against respective 6.6% growth,4.1% drop and 21% growth in 2010 to 1.4trl AMD or $3.8bln. In the structure of the obligations in Q2 2011 time deposits grew by 7.3% against 4.8% growth in Q1 2011, 6.2% decline in Q2 2010 and 2.1% growth in Q2 2009, call deposits by 0.3% against +7.2%, -10% and -1.6%, deposits and loans by banks and other financial organizations - by 17.3% against 4.7 growth in Q1 2011 and 0.01% drop in Q2 2010, loro accounts - by 25.2% against -11.1% and -7.8%. As compared with Q2 2011 time deposits grew by 27.6% against 30.3% annual growth in Q2 2010, call deposits - by 16.7% against 23.7% growth in Q2 2010, deposits and loans by banks and other financial organizations - twice against 47.3% growth in Q2 2010, loro accounts - by 41.8% against 10.1% growth in Q2 2010.
13 out of 21 banks registered quarterly growth in call deposits, 17 banks - in time deposits with 16 and 20 banks showing annual growth in call and time deposits, respectively.
In order to keep up their lending activities in the face of continuing crisis Armenia's commercial banks attract funds not only from the home market but also from external sources, including international credit programs, which help the banks to attract long-term and cheep funds, allowing them to offer more attractive terms. In 2009 Armenia received support loans from the World Bank and Russia. This money was given to commercial banks for being lent to SMEs. In late July 2011 the Government of Armenia decided to take 7.5bln AMD or $20mln from Russia's stabilization loan for subsidizing the interest on agricultural loans. This money will be provided by the Central Bank and the Government in AMD. In Q2 2010 the banks began receiving additional funds from KfW under its mortgage program.
In 2011 the Government agreed with KfW to receive funds for agriculture. The key reason why time deposits are growing is the decision by most of the banks to raise their rates. The growth in AMD deposits is due to the crisis of Mar 3 2009 when AMD slumped against USD by 22%. In the structure of the total obligations the share of time deposits made up 38.4%, call deposits - 22.4%, deposits and loans by banks and other financial organizations - 31.7% and loro accounts 0 06% or 542.4bln AMD, 315.7bln AMD, 446.8bln AMD and 8.9bln AMD, respectively. In Q2 2011 the shares of time deposits and deposits and loans by banks and other financial organizations grew by 0.1% and 2.7%, respectively, while the shares of call deposits and loro accounts dropped by respective 1.6% and 0.4%.
8 banks showed decline in call deposits in Q2 2011, 5 banks showed annual decline, the rest registered growth. Areximbank-GPB Group registered the biggest quarterly decline - 54.4% (12th position), Byblos Bank Armenia - the biggest annual decline - 49.2% (20th position). ADB recorded the biggest quarterly growth - 47% (16th position), ARARATBANK - the biggest annual growth - 3 times (5th position). The top three in the amount of call deposits are HSBC Bank Armenia - 68.2bln AMD, Ameriabank - 34.6bln AMD and VTB Bank Armenia - 33.1bln AMD. Ameriabank has the biggest corporate call deposit portfolio - 26.9bln AMD, HSBC Bank Armenia - the biggest personal call deposit portfolio - 42.9bln AMD. 4 banks showed decline in time deposits in Q2 2011, 1 bank showed annual decline, the rest registered growth. Converse Bank registered the biggest quarterly decline in the index - 23.8% (9th position), Mellat Bank - the biggest annual decline - 45.2% (21st position). ACBA-Credit Agricole Bank and ADB recorded the biggest quarterly growths - 35-36% (6th and 16th positions), ProCredit Bank - the biggest annual growth - 68.4% (18th place). Unibank has the biggest time deposit portfolio - 80.3bln AMD, followed by Ameriabank - 60.3bln AMD, Armbusinessbank - 52.7bln AMD, Ardshininvestbank - 45.9bln AMD and VTB Bank Armenia - 44.9bln AMD. These banks have 53% of the total time deposit portfolio of Armenia's banking system. Unibank is the leader in both corporate and personal time deposits - 32.9bln AMD and 47.4bln AMD, respectively. As of June 30 2011 HSBC Bank Armenia had the biggest share of call deposits in the total obligations - 53.3% while Unibank had the biggest share of time deposits in the total obligations - 83.2%.
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