Tuesday, February 25 2014 14:50
Total liabilities of Armenia's banking system up 24% to $6.1 bln in 2013
ArmInfo. Following a slowdown in growth rates in Q2 and Q3 2014, the total liabilities of the Armenian banking system accelerated their growth rates from 2.7% to 8.6% in Q4 2013 (against 5.3% rise in Q4 2012 and 9.5% rise in Q4 2011). In 2013 the total liabilities grew by 24% as compared with 2012 (against 19.7% growth in 2012 versus 2011 and 36.7% growth in 2011 versus 2010), having totaled 2.5 trillion AMD ($6.1 bln) by 1 Jan 2014.
According to the Analysis and Financial Rating of Armenian Banks prepared by the Agency of Rating Marketing Information (ArmInfo), the quarterly acceleration of growth rates of the total liabilities was due to the rise in the main components: time deposits were up 5.8% (against 7.1% growth in Q3 2013 and 5.2% growth in Q4 2012), call liabilities were up 22.1% (against 8.7% decline in Q3 2013 and 2.6% decline in Q4 2012), deposits and loans from the banks and other financial organizations rose by 5.2% (against 7.3% growth in Q3 2013 and 7.8% rise in Q4 2012), the banks' corresponding (loro) accounts grew by 10.4% (against 8.3% rise in Q3 2013 and 54.3% decline in Q4 2012). To recall, the considerable (71%) rise in the banks' loro accounts in Q2 was due to essential increase of this item in 4 banks (including Mellat Bank). Moreover, in Q3 Mellat Bank also increased this item considerably, while the other three banks reduced it. In Q4 only three banks essentially increased that balance item, with the biggest rise registered in Mellat Bank.
As compared with 2012, time deposits rose by 22% (against 33% growth in 2012), deposits and loans from the banks and other financial organizations were up 11.2% (against 13.4% rise in 2012), call liabilities rose by 45.5% (against 6.2% decline in 2012), funds on loro accounts grew twofold (against 56.1% reduction in 2012) mostly due to Anelik Bank and Mellat Bank. The annual dynamics of the liabilities demonstrates that to maintain the lending growth rates, the banks keep on attracting funds not only in the domestic market, but also from foreign sources, under international loan programs. The banks' more active involvement in international programs gives them an opportunity to attract long-term and "cheap" funds that allow providing loans on attractive terms. The growth rates of time deposits, which had accelerated since Q2 2010 (from 13% to 33-35% in 2011-2012) due to the rise in interest rates, substantially slowed down in 2013 apparently due to the lack of changes in the interest rates over the past few months. To note, the substantial growth in AMD deposits over the past 4 years was due to the 22% AMD devaluation on 3 March 2009.
19 out of 21 banks demonstrated y-o-y growth in time deposits, and 17 banks ensured y-o-y growth in call liabilities. Quarterly growth in time deposits was registered in 17 banks, and growth in call liabilities was fixed in 13 banks. BTA Bank demonstrated the biggest y-o-y rise in time deposits - by 80.5% (20th position in absolute terms), and ArmBusinessBank was the first by quarterly rise - by 34.6% (up from the 7th to the 5th position in absolute terms). Areximbank-Gazprombank Group secured the biggest y-o-y and quarterly growth in call liabilities - 2-13-fold (up from the 12th to the 1st position in absolute terms). The biggest y-o- y decline in call liabilities was fixed in Converse Bank - by 38.8% (down from the 4th to the 8th position in absolute terms), and the biggest quarterly decline was registered in ArmSwissBank - by 24.6% (19th position in absolute terms). The former significantly reduced the legal entities' funds, while the latter decreased the individuals' funds.
In the structure of total liabilities, the share of time deposits dropped from 43.7% to 42.6% in Q4 2013 (against 42.7% in Q4 2012), and the share of call liabilities rose from 20.1% to 22.6% (against 19.1% in Q4 2012), the share of deposits and loans from the banks and other financial organizations fell from 27.1% to 26.3% (against 29.2% in Q4 2012), and the share of the banks' corresponding (loro) accounts remained at 0.5% (against 0.3% in Q4 2012), whose absolute values as of 31 Dec 2013 totaled 1.1 trillion AMD, 558.1 billion AMD, 649.4 billion AMD and 12.7 billion AMD, respectively. For comparison it should be noted that in the pre-crisis year 2007 call deposits made up 35%, time deposits - over 37%, deposits and loans from the banks and other financial organizations - over 11%. In 2008 these indices made up 25%, 33% and 20% respectively, against 26%, 41% and 24% in 2009, 24%, 40% and 30% in 2010, 38%, 24% and 31% in 2011, 19%, 43% and 29% in 2012.
The biggest y-o-y and quarterly growth in call liabilities of Areximbank-Gazprombank Group was mostly due to 21-fold increase in the legal entities' funds. The biggest y-o-y and quarterly decline in call liabilities of Converse Bank and ArmSwissBank was due to substantial reduction in the legal entities' funds of Converse Bank and in the individuals' funds of ArmSwissBank. Areximbank- Gazprombank Group took the lead in call liabilities (126.7 bln AMD). HSBC Bank Armenia was the second with 83.2 bln AMD, and Ameriabank was the third with 61.6 bln AMD. Areximbank- Gazprombank Group was the lead in call liabilities of legal entities (122.3 bln AMD), with Ameriabank ranking next (47.1 bln AMD), while HSBC Bank Armenia took the lead in call liabilities of individuals (43.8 bln AMD).
The biggest quarterly growth in time deposits of ArmBusinessBank was due to almost 4-fold increase in legal entities' funds amid moderate growth in individuals' funds, while the biggest y-o-y growth in time deposits of BTA Bank was due to twofold increase in individuals' funds amid similar decline in legal entities' funds. The biggest decline in time deposits was registered in Mellat Bank (by 35.6%). Moreover, Mellat Bank holding the last 21st position with tiny time deposits consisting of non-residents' funds only reduced this portfolio over 2013 and almost retained it over Q4 2013. In terms of time deposits Ameriabank was in the lead with 115.1 bln AMD. Unibank was the second with 110.6 bln AMD, VTB Bank (Armenia) was the third with 106.52 bln AMD, Ardshininvestbank was the fourth with 105.2 bln AMD, and ArmBusinessBank was the last in the top 5 with 89.3 bln AMD. The share of the top 5 in the total time deposits of the banking system dropped from 51.3% to 50.1% in Q4 2013 and underwent no y- o-y changes. In terms of time deposits of individuals VTB Bank (Armenia) was the first with 84.6 bln AMD, Unibank ranked next (78.3 bln AMD), while in terms of time deposits of legal entities Ameriabank held the first position with 47.2 bln AMD, and Ardshininvestbank ranked next with 34.2 bln AMD.
As of 31 Dec 2013, HSBC Bank Armenia and Araratbank shared the first position with their shares of call liabilities in the total liabilities (40%), while Unibank was in the lead with its share of time deposits in the total liabilities (83%), and INECOBANK, ACBA-Credit Agricole Bank and ProCredit Bank took the lead in the share of interbank deposits/loans in the total liabilities (44- 59%), with ACBA-Credit Agricole Bank holding the biggest volume of interbank deposits/loans.
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