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.

POST A COMMENT
Input digits     


News
Joint Initative of HSBC Bank in Armenia and Jinishian Memorial Foundation (JMF) promotes innovative and sustainable agriculture among the small holder farmers.Joint Initative of HSBC Bank in Armenia and Jinishian Memorial Foundation (JMF) promotes innovative and sustainable agriculture among the small holder farmers.
Ameria PhonePOS.  New application for receiving non-cash payments with a smartphoneAmeria PhonePOS.  New application for receiving non-cash payments with a smartphone
Economy Ministry to support IT companies affected by dram  appreciationEconomy Ministry to support IT companies affected by dram  appreciation
Expert: There are a lot of random people in the tourism sector of  Armenia todayExpert: There are a lot of random people in the tourism sector of  Armenia today
Incomplete fulfillment of capital expenditures indicates a lack of  professionalism - EconomistIncomplete fulfillment of capital expenditures indicates a lack of  professionalism - Economist
EDB forecasts 4.2% GDP growth in Armenia in 2023 and gradual  devaluation of AMDEDB forecasts 4.2% GDP growth in Armenia in 2023 and gradual  devaluation of AMD
Sporadic construction of solar power plants could undermine Armenia`s  food security - expertSporadic construction of solar power plants could undermine Armenia`s  food security - expert
ADB to help Armenia develop wind energyADB to help Armenia develop wind energy
US considers granting Armenia market economy statusUS considers granting Armenia market economy status
Another dollar tranche of bonds from IDBankAnother dollar tranche of bonds from IDBank
Tourists arriving in Armenia faced difficulties due to cashless  payment requirements - MPTourists arriving in Armenia faced difficulties due to cashless  payment requirements - MP
Armenia`s tax authorities on peculiarities of taxation when renting  apartmentArmenia`s tax authorities on peculiarities of taxation when renting  apartment
AraratBank acts as an underwriter of National Mortgage Company RCO bonds   AraratBank acts as an underwriter of National Mortgage Company RCO bonds  
Converse Bank customer wins Visa campaignConverse Bank customer wins Visa campaign
Armenia`s economy recovered quickly after `September shock` - Vahan  KerobyanArmenia`s economy recovered quickly after `September shock` - Vahan  Kerobyan
AraratBank launches Google Pay for its card usersAraratBank launches Google Pay for its card users
Goods imported to Armenia to be liable to excise taxGoods imported to Armenia to be liable to excise tax
Armenia`s national debt in terms of figures not essential - Armenia`s  premier Armenia`s national debt in terms of figures not essential - Armenia`s  premier 
French Development Agency to open permanent office in YerevanFrench Development Agency to open permanent office in Yerevan
Proposed reform to introduce system of mandatory universal income  declaration system for all resident citizens in Armenia cannot ensure  achievement of the declared goals: Tigran JrbashyanProposed reform to introduce system of mandatory universal income  declaration system for all resident citizens in Armenia cannot ensure  achievement of the declared goals: Tigran Jrbashyan
IDBank  “MalatiaIDBank  “Malatia" branch now more comfortable and modern
Largest mining company in Armenia presents its first ESG reportLargest mining company in Armenia presents its first ESG report
It is already possible to make payments with IDBank cards via Apple PayIt is already possible to make payments with IDBank cards via Apple Pay
 Converse Bank announces the launch of the  new coupon bonds placement Converse Bank announces the launch of the  new coupon bonds placement
Vine and Wine Foundation of Armenia: Volumes of wine production in  Armenia almost doubled over 5 yearsVine and Wine Foundation of Armenia: Volumes of wine production in  Armenia almost doubled over 5 years
Armenia`s minister of territorial administration hosts  Ukrainian-Armenian businessmenArmenia`s minister of territorial administration hosts  Ukrainian-Armenian businessmen
Iranian Minister of Energy announces launch of project for  synchronization of electricity between   Iran, Azerbaijan, Armenia and RussiaIranian Minister of Energy announces launch of project for  synchronization of electricity between  Iran, Azerbaijan, Armenia and Russia
Armenia`s economy most likely to not reach its historical high by the  end of 2022: Haykaz FanyanArmenia`s economy most likely to not reach its historical high by the  end of 2022: Haykaz Fanyan
Yerevan, Tehran continue to expand economic relationsYerevan, Tehran continue to expand economic relations
Success of the family business based in Tavush: from a home to a guest house and a small winerySuccess of the family business based in Tavush: from a home to a guest house and a small winery
Armenia becomes popular destination for BelarusiansArmenia becomes popular destination for Belarusians
Satlantis CEO: Armenia did not buy an expensive Mercedes, but rather   established a plant that will produce itSatlantis CEO: Armenia did not buy an expensive Mercedes, but rather   established a plant that will produce it
Robert Khachatryan: Satellite Control Center in Armenia to be ready  by the end of the yearRobert Khachatryan: Satellite Control Center in Armenia to be ready  by the end of the year
Armenia starts construction of its first satelliteArmenia starts construction of its first satellite
Participation of GeoProMining in state subvention projects in Armenia reaches 1 billion 700 million drams ($ 4.2 million )Participation of GeoProMining in state subvention projects in Armenia reaches 1 billion 700 million drams ($ 4.2 million )
Significant progress has been made on the issue of launching the  ferry crossing Poti - Port Kavkaz - Deputy MinisterSignificant progress has been made on the issue of launching the  ferry crossing Poti - Port Kavkaz - Deputy Minister
Armenia sings two loan agreements with AFD, ADBArmenia sings two loan agreements with AFD, ADB
Multifunctional cultural production cluster to open in DilijanMultifunctional cultural production cluster to open in Dilijan
Vice-President of Interstate Bank: After the developments at the  beginning of 2022, the turnover in the national currencies in the  correspondent banks of the Interstate Bank has increased  significantlyVice-President of Interstate Bank: After the developments at the  beginning of 2022, the turnover in the national currencies in the  correspondent banks of the Interstate Bank has increased  significantly
On November 22, Converse Bank to sell AMD, USD bonds worth AMD 3  billion, USD 10 million On November 22, Converse Bank to sell AMD, USD bonds worth AMD 3  billion, USD 10 million 
Armenia`s economy is unhealthy: Economist offers ways to solve  existing problemsArmenia`s economy is unhealthy: Economist offers ways to solve  existing problems
Google pay and Google wallet available in ArmeniaGoogle pay and Google wallet available in Armenia
Europrotocol is losing its popularity in Armenia due drop in  confidence in insurers; Market is getting adventurousEuroprotocol is losing its popularity in Armenia due drop in  confidence in insurers; Market is getting adventurous
If the potential for electricity export to Iran is activated, it will  affect domestic tariffs - Mher GrigoryanIf the potential for electricity export to Iran is activated, it will  affect domestic tariffs - Mher Grigoryan
Armenia`s defense expenditures in 2023, compared to 2018, will  increase by 113%: Pashinyan announces transition to professional armyArmenia`s defense expenditures in 2023, compared to 2018, will  increase by 113%: Pashinyan announces transition to professional army
Armenia increased export deliveries 2.2-fold in OctoberArmenia increased export deliveries 2.2-fold in October
No alternative to Armenia`s accelerated economic development -  minister No alternative to Armenia`s accelerated economic development -  minister 
Telecom Armenia team restore ed Internet access issues by launching  backup channelTelecom Armenia team restore ed Internet access issues by launching  backup channel
Ameriabank Launches Google Pay and Google Wallet Support for Card Users in ArmeniaAmeriabank Launches Google Pay and Google Wallet Support for Card Users in Armenia
Team Telecom Armenia warns of problems with Internet accessTeam Telecom Armenia warns of problems with Internet access
The state debt of Armenia has exceeded the psychological threshold of  $10 billionThe state debt of Armenia has exceeded the psychological threshold of  $10 billion
Ardshinbank showcases the Google Pay for Android fans in ArmeniaArdshinbank showcases the Google Pay for Android fans in Armenia
Google Pay is a new contactless payment option for Converse Bank customersGoogle Pay is a new contactless payment option for Converse Bank customers
Google Pay™ is available for Acba bank customersGoogle Pay™ is available for Acba bank customers
Armenia`s economy suffering losses due to lack of universal basic  skills - experts Armenia`s economy suffering losses due to lack of universal basic  skills - experts 
Share of non-cash transactions in plastic card transaction near 40% Share of non-cash transactions in plastic card transaction near 40% 
Discussions on concept of comprehensive health insurance held in  Armenia with participation of WB representativesDiscussions on concept of comprehensive health insurance held in  Armenia with participation of WB representatives
Construction of Kapan-Chakaten bypass road in Syunik region of  Armenia has been completedConstruction of Kapan-Chakaten bypass road in Syunik region of  Armenia has been completed
Number of virtual vPOS terminals is approaching 4 thousand in  Armenia, continuing double-digit growth trendNumber of virtual vPOS terminals is approaching 4 thousand in  Armenia, continuing double-digit growth trend
Pashinyan promises Pashinyan promises "geometric growth" of economy, in case of  implementation of  peace agenda
Read more


Exchange rates
30.11.2022
RUB6.490.00
USD394.87-0.25
EUR408.89-1.36
GBP473.61-0.97
CAD291.55-2.18
JPY28.44-0.21
CNY55.020.13
CHF415.61-0.92