In Q1 2015, Central Banks equity dropped by 24% due to loss increase and considerable sagging of negative revaluation reserve

In Q1 2015, the Armenian 

Central Banks equity dropped by 24% due to the loss increase and considerable sagging of the negative revaluation reserve of the assets subject to sale. The CBA has told ArmInfo that despite such 

dynamics of the components, the CBA's equity remained at positive 18.2 bln AMD largely due to the additional authorized capital, which was increased in Q4 2014 due to the government non-negotiable 

non-interest bearing note. 

 

The source says that in Q1 2015 the share of accumulated loss in the CBA's equity grew by 4% to 134.6 bln AMD ($285.6 mln), the negative indicator of the revaluation reserve of the assets subject to sale 

increased almost threefold to 933.4 mln AMD ($2 mln), and the additional capital remained at 136.2 bln AMD ($289.1 mln). As compared to Q1 2014, the CBA's equity increased almost 5-fold (up from the negative level to a positive one), the accumulated loss dropped by 12.2%, the revaluation reserve of the assets subject to sale sagged more than 3-fold (down from the positive level to a negative one), and the additional capital increased by 6.2%. The main reserve and the issued capital remained unchanged - 17.4 bln AMD and 100 mln AMD, respectively. The additional authorized capital changes were as follows: in 2011 it was increased from 85.7 bln to 107.5 bln AMD due to the government non-negotiable non-interest bearing note; in 2012 it underwent no changes; in 2013 and 2014 it was increased in 

the same way to 128.2 bln AMD and then to 136.2 bln AMD.  

 

Thanks to the government note, the CBA's equity rose from the negative level to a positive one in early 2012 and remained at the positive level till 1 October 2012. Another rise to the positive level was registered in the equity in Q4 2014, with further reduction in 2015 because of the growing loss. In Q1 2015, the CBA's total assets fell by 0.9% (versus 7.1% decline in Q1 2014) to $2.872 bln or 1.353 trillion AMD, including 56.4% or 762.9 bln AMD ($1.6 bln) forex assets and 43.6% or 592.1 bln AMD ($1.3 bln) AMD assets. In Q1 2015, the forex assets fell by 1.1% (versus 10.1% drop in Q1 2014), with the AMD assets diminishing by 0.7% (versus 11.4% drop in Q1 2014). As compared to Q1 2014, the CBA's assets increased by 6.8% due to the AMD component growth by 50.2% amid the 12.7% decline in the forex component. In the structure of forex assets, quarterly decline was registered in all components, except the funds in the banks and other financial organizations (up 11.3% to 263.5 bln AMD). In the structure of AMD assets, quarterly growth was registered in the assets subject to sale (up 11.4% to 210.7 bln AMD). In particular, in Q1 2015 the assets to redemption in the structure of forex assets fell by 14.4% to 80.6 bln, and the funds in the IMF dropped by 9% to 60.3 bln, the actual cost financialinstruments declined by 4.1% to 340.6 bln, the disposable funds - by 2.2% to 17.8 bln AMD. In the AMD assets, the funds in the banks and other financial organizations diminished by 7.7% to 296.5 bln AMD, and the main funds and intangible assets fell 

by 1.1% to 70.6 bln AMD. 

 

In Q1 2015, the CBA's general obligations fell by 0.5% (versus 7.1% decline in Q1 2014) to 1.335 trillion AMD ($3.525 bln), including 32.7% or 437.2 bln AMD ($927.9 mln) forex liabilities and 67.3% or 897.6 bln AMD ($1.9 bln) AMD liabilities. As compared to Q4 2014, the AMD liabilities were up 3.8% (down 14.1% in Q1 2014), and the forex liabilities fell by 8.1% (down 5.6% in Q1 2014). As compared to Q1 2014, the CBA's general obligations were up 4.8% due to the AMD component growth by 21.4% amid the 18.1% fall in the forex component. In the structure of forex liabilities, quarterly decline was fixed in 

all components, except derivative financial instruments (up 57.2% to 1.3 bln AMD) and other borrowings (up 4.6% to 74.5 bln AMD). The steepest quarterly decline in the forex liabilities was registered in 

the payable to the Government - by 23.3% to 2.3 bln AMD, as well as in the balances on the deposit and current accounts of financial organizations - by 18.7% to 112.8 bln AMD, payables to the IMF - by 

6% to 246 bln AMD. In the structure of the AMD liabilities, the only quarterly growth was fixed in the payables to the Government - almost twofold to 215.4 bln AMD. As regards the rest of the components, the banknotes and coins in circulation experienced tangible decline - by 16.1% to 345.9 bln AMD. 

 

According to the CBA, as of 1 Jan 2015, the accumulated loss totaled 129.4 bln AMD, the total capital amounted to positive 23.9 bln AMD, assets - 1.4 trillion AMD (including 770.9 bln AMD forex assets and 

594 bln AMD in terms of Armenian dram), general obligations - 1.3 trillion AMD (with forex liabilities being 475.9 bln AMD and AMD liabilities being 865.2 bln AMD). To note, on 31 July 2014, the Armenian Government took a decision to issue a non-negotiable non-interest bearing note worth 106.2 bln AMD to cover the CBA's loss accumulated as of late 2013. This note will replace the previous issue worth 98.2 bln AMD (September 2013), which was to cover the CBA's loss at the yearend of 2012. To recall, in August 2011 the Finance Ministry provided the CBA with a government note worth 77.5 bln AMD to cover the loss accumulated as of late 2010.