Tuesday, August 23 2016 18:41
Karine Melikyan

Central Bank of Armenia forecasts nearly 50% growth of aggregate loan portfolio of banks by 2019

Central Bank of Armenia forecasts nearly 50% growth of aggregate loan portfolio of banks by 2019

ArmInfo. According to the forecast of the Central Bank of Armenia assets of Armenian banking system will increase by 28.7% in 2016-2018 with 8.8% average year-over-year growth. At the same time loan portfolio will increase by 45.5% over three years (13.3% average y-o-y growth). According to "Prospects of Development of Banking System in 2016-2018" official forecast by CBA the structure of assets in terms of shares of the main components will experience the following changes: share of cash funds will reduce from 3.8% to 2.9%, corresponding accounts in the Central Bank and the banks will fall to 13.3% from 18.4%, deposits/loans placed in banks and financial organizations will fall to 1.7% from 2.1%. At the same time loan portfolio in total assets will increase to 66.4% from 58.8%, investments in securities will grow to 6.5% from 3.6%, leasing and factoring will demonstrate non- significant growth from 0.8% to 1%. Fixed assets will remain almost unchanged falling to 2.8% from 3%.

In 2016-2018 in the structure of loan portfolio consumer loans will increase by 51.1% amid 14.9% average y-o-y growth with their share growing from 19.5% to 20.6%. Amount of lending to trade will increase by 46.1% over three years (by 13.5% in average over year) with growth of share from 16% to 16.3%. Lending to processing industry will increase by 37.8% over three years (11.3% average y-o-y growth) and its share in portfolio will grow from 7.8% to 8.1%. In 2016-2018 mortgage portfolio will grow by 50.4% (14.6% y- o-y growth) with increase of its share from 8.3% to 8.7%. Share of agricultural loans in total portfolio will reduce from 6.9% to 6.6%, share of construction field lending will not change-5%, lending to industry will change insignificantly from 10.5% to 10.2%, share of lending to financial sector will reduce from 5% to 3.9%.

General obligations will increase by 20.2% in 2016-2018 (6.4% average y-o-y growth). In their structure personal deposits and those of legal entities will increase by 27.2% over three years and their share in general obligations will grow to 64.1% from 60.6%. Particularly, personal deposits will increase by 28.9% and deposits by legal entities by 23.8%. In the structure of deposits the share of personal ones will increase to 67.3% from 66.4% in 2016-2018, while deposits by legal entities will on the contrary fall from 33.6% to 32.7%. As for the types of deposits call liabilities will reduce to 30% from 31.1% amid growth of time deposits from 68.9% to 70%. In overall call liabilities will increase by 22.6% over 2016-2018 while time deposits by 29.3%. In the period between 2016 and 2018 the banks plan to increase amount of attracted inter-bank deposits/loans by 32.2%, as a result of which their share in general obligations will increase from 18.6% to 20.5%.

The structure of general obligations will change as follows over 2016-2018: share of attracted deposits/loans will grow to 20.5% from 18.6%, personal time deposits to 35.3% from 33%, time deposits of legal entities to 9.6% from 9%, at the same time call liabilities of legal entities and personal call liabilities will experience insignificant growth-to 11.4% from 11.3% and to 7.9% from 7.5% respectively.

As a result aggregate profit of banking system will increase by 35.1% over 2016-2018 amid growth of expenses by 19.3%. Particularly, share of interest income will increase from 76.7% to 80.3% amid decline of share of non-interest income from 23.7% to 19.7%. Thus, net interest income will grow in three-year term by 81.4% amid decline of net non-interest income by 59.3%. Allowances for losses will reduce by 41.8% in three years and their share in total assets will reduce to 1.4% from 3.1%. As a result net interest margin in banking system will be volatile between 2.9-5.3%.

According to forecast of the CBA total capital of Armenia's banks will increase by 79% in 2016-2018 (22.7% average y-o-y growth). In its structure share of authorized capital will reduce to 65% from 69%, amid which share of income will grow to 28% from 21%. ROA is forecasted between negative 0.7% and positive 2% in 2016-2018, and ROE between negative 4.2% and positive 9.7%. In the three-year forecast the banks can be divided in three groups based on ROA and ROE. Thus, according to the forecast there will be 5 banks with ROA hovering around 2.5-3.5%, 9 banks-1.5-2.5% and the remaining with ROA lower than 1.5%, while there will be 5 banks with ROE volatile between 11-16%, 5 banks-8-11% and remaining with ROE lower than 8%.

According to Ranking of Armenian Banks prepared by ArmInfo, assets of the country's banking system totaled 3.5 trillion AMD as of July 1, 2016. In their structure share of credit exposures was 67.6% or 2.4 trillion AMD, while investments in securities made up 8.9% or 310.4 bln AMD. General obligations totaled 2.9 trillion AMD as of July 1, 2016. In their structure share of time deposits was 47.5% or 1.4 trillion AMD. Total capital of the banks reached 582.6 bln AMD as of July 1 2016, from which authorized capital- 63.3% and accumulated profit-26.2%. As of the first half of 2016 Armenian banks had net profit amounted to 12.4 bln AMD (exchange rate was fixed at 476.68 AMD/$1 as of June 30, 2016).

To note, there are 19 banks currently operating in Armenia versus 21 banks in previous year. BTA Bank and ProCredit Bank have left the market merging with Armeconombank and INECOBANK respectively.  The Armenian Central Bank's new minimum total capital requirement (30 bln AMD versus current 5 bln) will come into force since Jan 1, 2017.

POST A COMMENT
Input digits     


News
Armenian government discuss draft budget for 2023Armenian government discuss draft budget for 2023
CB new forecast for 2022-2023: Armenian GDP growth will slow down  from 12.9% to 4.4%, and inflation will decrease from 10.3% to the  target 4%CB new forecast for 2022-2023: Armenian GDP growth will slow down  from 12.9% to 4.4%, and inflation will decrease from 10.3% to the  target 4%
The first snail breeding farm was established in ArmeniaThe first snail breeding farm was established in Armenia
EBRD improves its 2022 GDP growth forecast for Armenia from previous  4.5% to updated 8%EBRD improves its 2022 GDP growth forecast for Armenia from previous  4.5% to updated 8%
Armenian authorities` intention to construct a new, 1,200 MW, nuclear  power unit is erroneous- expertArmenian authorities` intention to construct a new, 1,200 MW, nuclear  power unit is erroneous- expert
Wizz Air starts operating Rome-Yerevan-Rome flightsWizz Air starts operating Rome-Yerevan-Rome flights
3rd session of Geographical Indications sub-committee under CEPA  between Armenia and EU took place3rd session of Geographical Indications sub-committee under CEPA  between Armenia and EU took place
Armenia`s GDP growth to be double-digit in 2022 - EconomistArmenia`s GDP growth to be double-digit in 2022 - Economist
 USD 25 million to support the private sector USD 25 million to support the private sector
Armenia`s economic activity increased by 13.9% in 8 months of 2022Armenia`s economic activity increased by 13.9% in 8 months of 2022
Armenia-Italy Textile Alliance Forum started in MilanArmenia-Italy Textile Alliance Forum started in Milan
Dmitry Volvach: Trading volumes of the ruble-dram currency pair  increased more than 1000-fold on the Moscow ExchangeDmitry Volvach: Trading volumes of the ruble-dram currency pair  increased more than 1000-fold on the Moscow Exchange
Armenia`s minister of economy hosts WB Country Manager for ArmeniaArmenia`s minister of economy hosts WB Country Manager for Armenia
EBRD launches climate governance platform for business leaders in  Ukraine, Georgia and ArmeniaEBRD launches climate governance platform for business leaders in  Ukraine, Georgia and Armenia
Another step in promoting the Armenian-Russian decentralized  cooperation: Pashinyan`s address to participants of Armenian-Russian Interregional Forum Another step in promoting the Armenian-Russian decentralized  cooperation: Pashinyan`s address to participants of Armenian-Russian Interregional Forum 
Iran Khodro Company starts supplying cars to ArmeniaIran Khodro Company starts supplying cars to Armenia
Armenia, China are considering  possibility of organizing direct  flights between  countriesArmenia, China are considering  possibility of organizing direct  flights between  countries
Expert: With the stabilization of the military-political situation,  the exchange rate in Armenia will also stabilizeExpert: With the stabilization of the military-political situation,  the exchange rate in Armenia will also stabilize
Gradual softening of the global inflationary environment will weaken  the inflationary impact from the external sector on the Armenian  economyGradual softening of the global inflationary environment will weaken  the inflationary impact from the external sector on the Armenian  economy
CBA significantly improves its forecast for GDP growth for 2022 to  12.9%, but expects inflation at 10.3%CBA significantly improves its forecast for GDP growth for 2022 to  12.9%, but expects inflation at 10.3%
Central Bank of Armenia raised refinancing rate from 9.5% to 10%Central Bank of Armenia raised refinancing rate from 9.5% to 10%
TOTAL opens training center in Etchmiadzin for training specialistsTOTAL opens training center in Etchmiadzin for training specialists
WB stands ready to continue to assist Armenian government in  implementation of priority programsWB stands ready to continue to assist Armenian government in  implementation of priority programs
Armenia`s producers to get 1% tax reduction for recalling spoiled  productsArmenia`s producers to get 1% tax reduction for recalling spoiled  products
FLY ONE Armenia transported over 200.000 passengers in its first year  in marketFLY ONE Armenia transported over 200.000 passengers in its first year  in market
Armenia`s minister of economy visits ski resort construction project  in Aragatsotn Armenia`s minister of economy visits ski resort construction project  in Aragatsotn 
Pashinyan instructs to find new investors for mines that are  currently not being developedPashinyan instructs to find new investors for mines that are  currently not being developed
AMD 4.676.836 to the “Rehabilitation City of Heroes” psychological center: the next beneficiary of “The Power of One Dram” is the 4090 FoundationAMD 4.676.836 to the “Rehabilitation City of Heroes” psychological center: the next beneficiary of “The Power of One Dram” is the 4090 Foundation
ACBA Bank fourth bank to join government-sponsored 10% cashback  programme for pensioners and reliefersACBA Bank fourth bank to join government-sponsored 10% cashback  programme for pensioners and reliefers
Presentation of Jobbit instrument held in Yerevan Presentation of Jobbit instrument held in Yerevan 
New power unit under construction at Kursk NPP could be serve as  standard for Armenia - ministerNew power unit under construction at Kursk NPP could be serve as  standard for Armenia - minister
Diaspora factor in Armenia`s investment portfolio is decliningDiaspora factor in Armenia`s investment portfolio is declining
Foreign investors present existing problems to Deputy Prime Minister  of ArmeniaForeign investors present existing problems to Deputy Prime Minister  of Armenia
Araratbank to put up for sale another tranche of dollar bonds worth  $3 million on September 8Araratbank to put up for sale another tranche of dollar bonds worth  $3 million on September 8
Ameriabank starts initial placement of another tranche of USD bonds  in amount of $10 millionAmeriabank starts initial placement of another tranche of USD bonds  in amount of $10 million
Pashinyan hopes that Moscow will regard relocation of Russians as  movement within EAEU: Putin sees nothing wrong with thisPashinyan hopes that Moscow will regard relocation of Russians as  movement within EAEU: Putin sees nothing wrong with this
Armenia`s premier on secondary western sanctions over intensified  contacts with Russia Armenia`s premier on secondary western sanctions over intensified  contacts with Russia 
Armenia is very concerned with unblocking transport links with  Azerbaijan Armenia is very concerned with unblocking transport links with  Azerbaijan 
Nikol Pashinyan links economic growth in Armenia with EAEU  regulationsNikol Pashinyan links economic growth in Armenia with EAEU  regulations
IDBank issues the first premium class business cards in ArmeniaIDBank issues the first premium class business cards in Armenia
Kerobyan: More than 50,000 Russian IT specialists arrived in ArmeniaKerobyan: More than 50,000 Russian IT specialists arrived in Armenia
Converse Bank has come up with a unique offer to encourage online shoppingConverse Bank has come up with a unique offer to encourage online shopping
IDBank is the first in Armenia to present Visa Platinum Business cardIDBank is the first in Armenia to present Visa Platinum Business card
AraratBank issues and underwrites USD 3,000,000 bondsAraratBank issues and underwrites USD 3,000,000 bonds
Fitch Affirms Armenia`s Sovereign Rating at B+, Upgrades GDP Growth  Outlook to 6.4%Fitch Affirms Armenia`s Sovereign Rating at B+, Upgrades GDP Growth  Outlook to 6.4%
Armenian SRC Deputy Head, Iranian Consul General in Kapan discuss  methods of facilitating customs procedures Armenian SRC Deputy Head, Iranian Consul General in Kapan discuss  methods of facilitating customs procedures 
Armenia to host production of Iranian carsArmenia to host production of Iranian cars
WB to issue a $26.5mln loan to ArmeniaWB to issue a $26.5mln loan to Armenia
Ardshinbank named Retail Bank of the Year by the international magazine Asian Banking & FinanceArdshinbank named Retail Bank of the Year by the international magazine Asian Banking & Finance
Armenia has significantly increased polished diamond exports and  rough diamond importsArmenia has significantly increased polished diamond exports and  rough diamond imports
Armenia significantly increased gold exports in H1 2022Armenia significantly increased gold exports in H1 2022
Armenian-Iranian business forum was held in YerevanArmenian-Iranian business forum was held in Yerevan
Converse Bank offers SME financing without financial analysisConverse Bank offers SME financing without financial analysis
Minister: As a result of relocation, 300 large companies with Russian  capital were registered in ArmeniaMinister: As a result of relocation, 300 large companies with Russian  capital were registered in Armenia
Ardshinbank supports development of Armenian jazz musicArdshinbank supports development of Armenian jazz music
Ameriabank expands branch network in YerevanAmeriabank expands branch network in Yerevan
Winner of Buissup Global Forum 2021 to represent Armenia at  Entrepreneurship World Cup 2022Winner of Buissup Global Forum 2021 to represent Armenia at  Entrepreneurship World Cup 2022
CPC reveals violations in production and sale of bottled  non-carbonated waterCPC reveals violations in production and sale of bottled  non-carbonated water
Orion, BAJ Accelerator launching one more startup growth acceleration  programOrion, BAJ Accelerator launching one more startup growth acceleration  program
Deutsche Telekom AG to launch activities in Armenia Deutsche Telekom AG to launch activities in Armenia 
Read more


Exchange rates
28.09.2022
RUB6.99-0.06
USD408.04-1.78
EUR390.29-4.24
GBP434.69-7.92
CAD296.41-3.06
JPY28.20-0.20
CNY57.38-0.57
CHF412.24-2.89