Monday, September 5 2016 19:15
Karine Melikyan

Banks of Armenia continue intensive capitalization, while experts anticipate new mergers

Banks of Armenia continue intensive capitalization, while experts anticipate new mergers

ArmInfo. Banks of Armenia continue intensive capitalization, while experts anticipate new mergers till the end of 2016. According to the data of Financial Ranking of Armenian banks prepared by ArmInfo only 7 banks out of 19 have so far met the the minimal capital requirement, which according to the CBA's decision must not be less than 30 bln drams starting from 2017.

Ameriabank, ACBA-Credit Agricole Bank, HSBC Bank Armenia, Ardshinbank, VTB Bank (Armenia), INECOBANK and Armbusinessbank are leaders in terms of capital, the total capital of which is hovering around 32-60 bln AMD as of July 1 2016. INECOBANK merged with ProCredit Bank in December 2015 and Ameribank with Cascade Bank in June 2010. Besides, in the beginning of this year Ameriabank by additional issue attracted EBRD an institutional investor into its capital, and received large subordinated loan from IFC. INECOBANK also replenished its capital via issue of stocks in December 2015 in parallel merging with ProCredit Bank, for which IFC provided a considerable loan on financing of certain obligations.

Out of the remaining 12 banks, the capitals of which still do not meet the new standard Unibank (by 33.57%), Byblos Bank Armenia (almost 3-fold) and Mellat bank (by 27.62%) have replenished their authorized funds in Q2 2016. In Q1 Armeconombank (2.7-fold) was the only one to register replenishment of authorized capital due to BTA Bank's merger with it, but as that was not enough to meet the new requirement IPO was opened in June planned to be finished in November this year. Within 2015 after the regulator had announced about the new standard of capital (30 bln AMD to come into force since Jan 1 2017 versus current 5bln AMD) 8 banks have replenished their authorized capitals: Ameriabank, VTB Bank (Armenia), Areximbank-GPB Group, INECOBANK, Anelik Bank, Unibank, Artsakhbank and Mellat Bank. Three of them underwent capitalization in 2014 as well -VTB Bank (Armenia), INECOBANK and Mellat Bank, Armbusinessbank, Ardshinbank and Converse Bank also replenished their capitals in 2014.

As of July 1, 2016 Unibank needs the least capitalization (around 1.2 bln AMD), followed by Prometey and Mellat Banks-around 5-6 bln AMD, Araratbank, Armswissbank and Converse Bank-7-8 bln AMD, while the rest 6 banks need 10-20 bln AMD to meet the new standard, these banks are: Armeconombank, Armenian Development Bank, Artsakhbank, Anelik Bank, Byblos Bank Armenia and Areximbank-GPB Group, moreover the latter three banks will have to carry out the task of capitalization considering accumulated loss.  Unibank and Armeconombank are in the process of replenishing their capitals via IPO and Araratbank will join their list in the nearest future, the bank is preparing for close additional issue of stocks. At the same time according to financial analysts of ArmInfo in the upcoming 2-3 months new mergers will be announced on the banking market. Otherwise, the Central Bank of Armenia will have to launch procedure of liquidation, and apparently it will not do that.

To note, there are 19 banks currently operating in Armenia and only 7 of them currently meet the Central Bank's requirement of minimal total capital of 30 bln AMD to come into force from Jan 1 2017,  versus current 5 bln AMD. Total capital of the banks reached 582.6  bln AMD as of July 1 2016, with 19.4% y-o-y growth due to growth of  registered capital by 28% (to 368.6 bln AMD) amid drop of accumulated profit by 3.5% (to 152.5 bln AMD). In y-o-y terms 9 banks nderwent capitalization including INECOBANK and Armeconombank via merger with  ProCreditBank and BTA Bank respectively. Although none of 12 banks has announced about merger yet consolidations will further take place to meet the new requirement and synergy effect for some players of Armenian banking sectors is possible.


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Government Bonds

Issue volume

10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

Volume of satisfied bids

200 million

Yield at cut-off price

 5.8314%

Maximum yield

 5.8314%

Мinimum yield

 5.8314%

Weighted average yield

 5.8314%

Number of participants

2

The maturity date of T-bills

03.02.2020

ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

Мин. Цена

482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000