Tuesday, February 25 2014 13:28

Armenia's banks are most active in consumer lending


ArmInfo. Armenia's banks are most active in financing trade, industry, agriculture and construction. In Q4 2010 till Q1 2011 industry enjoyed the biggest share in the banks' loan book, in Q2 2011 till Q2 2013 the biggest borrower was trade, since Q2 2013 the banks' have been most active consumer lending.

According to ArmInfo's Analysis and Financial Rating of Banks of Armenia, as of De 31 2013 consumer lending made up 386.9bln AMD ($953.9mln) or 21.9% of all loans. 42% of consumer loans were mortgage and auto loans, the rest were credit cards, overdrafts and hire purchases. The top five in consumer lending are VTB Bank (Armenia) 44.5bln AMD, Unibank 49.3bkn AMD, ACBA-Credit Agricole Bank 44.5bln AMD, Ardshininvestbank 41.5bln AMD and Converse Bank 27bln AMD. 17 of 21 banks registered growth in consumer loan books. Armbusinessbank and ArmSwissbank recorded the biggest growths in the index (twice as much as a year before) HSBC Bank Armenia the biggest drop (10.9%). Unibank and BTA Bank registered the biggest shares of consumer loans in their total loan books - 42% and 34%, respectively.

Trade has the second biggest share in the banks' loan book - 21% or 371.9bln AMD ($916.8mln), which is 9.2% more than a year before. The top five creditors of the sector are Ameriabank with 44.7bln AMD, VTB Bank (Armenia) with 41.9bln AMD, HSBC Bank Armenia with 37.3bln AMD, Ardshininvestbank with 35.5bln AMD and INECOBANK with 28.6bln AMD. 12 of 21 banks registered growth in the index, with the biggest growth (79.7%) registered by Ardshininvestbank and the smallest one by ACBA-Credit Agricole Bank (26.3%).

Industry is the third biggest borrower: in 2013 it received 19.4% of all loans or 343.7bln AMD ($847.2mln), which was 17.7% more than in 2012. The top five creditors of the sector are Ardshininvestbank with 53.7ln AMD, HSBC Bank Armenia with 41.6bln AMD, Areximbank-Gazprombank Group with 35.3bln AMD, ACBA-Credit Agircole Bank with 34bln AMD and Ameriabank with 33.9bln AMD. 15 of 21 banks registered growth in the index. VTB Bank (Armenia) redoubled its activity in the sector, with Unibank and Araratbank having registered the biggest drops (26-28%).

Agriculture has the fourth biggest share in the banks' loan book. In Apr 2011 the Government launched a program to subsidize the interest on agricultural loans, which already involves Ardshininvestbank, Converse Bank, ACBA-Credit Agricole Bank, ProCredit Bank and Artsakhbank. In 2013 Armenia's banks lent agriculture a total of 112.3bln AMD or $276.9mln (6.4% of all loans), with 48% of the money or 53.5bln AMD lent by ABCA-Credit Agricole Bank, a bank that normally gives almost 30% of its loans to agriculture. The other leaders here are VTB Bank (Armenia) 11.7bln AMD, Ardshininvestbank 6.9bln AMD, Areximbank-Gazprombank Group 6.7bln AMD and ProCredit Bank 5.9bln AMD. 12 of 21 banks registered a total 22.8% growth in their agricultural lending. Prometey Bank recorded the biggest (78.5%) drop in the sector. In Jan-Apr 2013 Mellat Bank increased its agricultural loan book from 53.3mln AMD to 70.2mln AMD but on Jan 1 2014 it cut the portfolio to 55.5mln AMD to focus on trade and consumer lending. Construction is the fifth with 6.2% of the total loan book or 109.4bln AMD ($269.7mln), which is 7.7% more than in 2012. HSBC Bank Armenia is the most active lender in this sector with 14.7bln AMD, VTB Bank (Armenia) is the second with 13.6bln AMD, Armbusinessbank with the third with 13.5bln AMD, Ameriabank is the fourth with 10.1bln AMD, Converse Bank with the fifth with 9.7bln AMD. 12 of 21 banks registered growth in the index. Byblos Bank Armenia stopped financing construction in Q2 2011, BTA Bank did it one quarter earlier but resumed the financing in Q2 2013.
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