Friday, December 26 2014 10:23

Former head of Armenian Central Bank: Profit deflation in banking system will continue in 2015


ArmInfo. Profit deflation tendency in the banking system of Armenia will continue in 2015 too, Bagrat Asatryan, former head of the Armenian Central Bank, economist, told ArmInfo.

With the profit growth rates slackening for a long period of time, the profitability dynamics remained negative, Asatryan said. "And this is a stable tendency," he added.

By data of the Financial Rating of Armenian banks prepared by ArmInfo, net profits of the Armenian banks for Jan-Sept 2014 amounted to 28.2 bln drams ($69.1 mln), with a 20.1% year-over-year decline. The profit deflation resulted mainly from the yield decline and deterioration of the loan portfolio quality in the banking system. All indications are that the banking system will sum up the outgoing year with reduced profits. For comparison, net profits of the Armenian banking system in the crisis year 2009 fell 48.8%. In 2010, this indicator grew over twofold. However, in 2011, net profit growth rates fell to 21.2%. The downward trends continued also in 2012, when net profits fell to 7.4%. In 2013, the net profits growth rates grew to 22% and then began to decline again in 2014, and negative dynamics was registered already in September.
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