Monday, February 8 2016 16:55

ArmInfo. Six big Armenian banks secured the Central Bank's minimum total capital requirement for 2017 - 30 bln drams - as early as in the beginning of 2016. These are Ameriabank, ACBA-Credit Agricole Bank, HSBC Bank Armenia, Ardshinbank, VTB Bank (Armenia) and INECOBANK. 

Total capital of these banks for Jan 1 2016 ranged between 40bln-59bln drams ($84mln-$123mln).  Top five banks by this indicator were known yet in 2013, while INECOBANK joined the leaders in late 2015 after increasing its capital through merger with ProCredit Bank.  The accumulated profit of these 6 banks is 3.3bln-32.7bln drams (VTB Bank (Armenia) received the lowest profits, HSBC Bank Armenia ensured the highest profits).  Armbusinessbank and Areximbank-GPB Group have approached the leaders, as they need some 1.5-3bln drams to ensure the minimum capital requirement of 30bln drams. Armbusinessbank may reach that level in 2016 through profits, while Areximbank-GPB Group will need more investments to cover its loss.

To meet the capital requirement of 30bln drams, four banks need 6-8 billion drams (Prometey, Unibank, Converse and Araratbank), another four banks need 11bln-14 bln drams (Mellat, AmrSwissbank and Anelik Bank, and Armeconombank), and the three outsiders need more than 20 bln drams (Artsakhbank, Armenian Development Bank and Byblos Bank).  Experts and market participants say a country like Armenia needs no more than 10-12 banks.  Including 5-6 big banks are backbone banks, while the others are in the niche.  Therefore, the consolidation of the banking system will be continued in 2016 as well.

According to ArmInfo's Financial Rating of Armenian Banks, the summary total capital of the banking system of Armenia for the beginning of 2016 amounted to 562bln drams ($1.2bln) with a 17.8% year-on- year growth. For Q4 2015 alone, this indicator increased 9.9%. The statutory fund accounted for 63.2% of the total, while the accumulated profits amounted for 28.9% versus 58.8% and 33%, respectively, a year ago.  Within 2015, eight banks replenished their statutory capitals: Artsakhbank (Q1 - 68.6%), Mellat Bank (Q2 - 79.2%), Areximbank-GPB Group (Q4 - 57.4%), Ameriabank (Q4 - 56.4%), VTB Bank (Armenia) (Q4 - 81.3%), INECOBANK (Q4 - 85.1% taking into account the merger with ProCredit Bank), Anelik Bank (Q4 - 12.3%) and Unibank (Q4 - 18.7%).

The summary net profits of the Armenian banks in 2015 amounted to 18.3bln drams (37.7mln drams), with a 12.4% year-on-year growth. 12 banks operated with profits - 29.6bln drams, while 5 suffered losses - 11.3bln drams. HSBC Bank Ar,emoa was the leader by net profits (6.4bln drams), while Artsakhbank suffered the steepest decline (4.2bln drams).