Thursday, April 25 2013 14:14
Net profit of Armenian banks down 37.3% in Q1 2013
ArmInfo. In Q1 2013 the net profit of Armenia's banks dropped by 37.3% to 8.5bln AMD, while the loans grew by 6% to 1.6tln AMD.
AmRating's experts believe that the key reason why the net profit dropped is that many of the banks have finally written off their overdue loans.
One more explanation is that in Q1 lending activity is generally low mostly because in February banks are just "recovering" from high New Year expenses.
Also a big blow for profit and capital are high overdue loan reserves.
One more possible reason might be that many companies were waiting for the results of the presidential election. In March they regained speed, but that proved not enough.
As regards retail lending, it is not so dependent on external factors because its seasonality differs from that of corporate lending.
According to ArmInfo's Express Ranking of Banks of Armenia, in Q1 2013 top 5 creditors in Armenia's banking system were VTB Bank (Armenia) 176.4bln AMD (11.8% more than in Q4 2012 and 15.4% more than in Q1 2012), Ameriabank 176.1bln AMD (+13.2% and +29%), ACBA-Credit Agricole Bank 165.7bln AMD (+4% and +9.5%), Ardshininvestbank 146.7bln AMD (+11.1%) and HSBC Bank Armenia 138bln AMD (+6.2% and +25%).
HSBC Bank Armenia, Ameriabank and Ardshinininvest registered the biggest net profits in Q1 2013 – 1.9bln AMD, 1.4bln AMD and 1bln AMD, respectively. The net profits of VTB Bank (Armenia) and ABCA-Credit Agricole Bank dropped by 16-29% to 0.8bln AMD each.
In Q1 2013 borrowings from banks and other organizations grew by 2.1% against 3.1% growth in Q4 2012, while borrowings from customers grew by 11% against 5.7% in Q4 2012.
ACBA-Credit Agricole Bank borrowed 104.8bln AMD from banks and other organizations (52% of its obligations), VTB Bank (Armenia) 83.8bln AMD (41%), Ameriabank 80.8bln AMD (30%), INECOBANK 64.2bln AMD (65%) and Areximbank-Gazprombank Group 61.8bln AMD (58%).
The leader in borrowings to customers is Ameriabank 186.4bln AMD (69% of its obligations), followed by HSBC Bank Armenia 144.2bln AMD (78%), Ardshininvestbank 124.8bln AMD (67%), VTB Bank (Armenia) 121bln AMD (58%) and Unibank 119bln AMD (95%).
In Q1 2013 the banks' external and internal borrowings grew by 11% to more than 2tln AMD. The growth in lending was lower mostly because the banks have not yet used all of the funds they received under foreign credit programs.
Capital adequacy dropped from 26% to 22% (with the required minimum being 12%), overall liquidity from 29% to 27% (min 15%), while current liquidity grew from 190% to 206% (min 60%).
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