Arman Barseghyan: further reduction of interest rates is unlikely in Armenia`s banking market

ArmInfo. Today the situation on the banking market of Armenia is such that further lowering of interest rates should not be expected. Answering the question of ArmInfo during an online conference broadcast on-line on the official page of Ameriabank in Facebook on the theme "Tendencies of interest rate changes," said Ameriabank Retail Banking Director Arman Barseghyan.

He explained that due to lower interest rates from the point of view of many banks, the level of profitability is not economically justified today. "In the case of dram deposits, interest rates have already fallen to the limit of 8-9%, and a decline from this range is illogical in terms of generating profits and increasing capital.  I believe that the fall in interest rates will stop and stabilize. In the future, depending on the circumstances, some growth is possible, but even if this does not happen, lower interest rates are unlikely, "he said, noting that business entities in need of loans should take advantage of the opportunity today.

According to the Central Bank, interest rates on AMD loans by September 1, 2017 amounted to 14.01% (against 17.44% a year earlier), on dram deposits - 9.42% (against 12.04% a year earlier).

According to the Financial Rating of the Armenian Banks as of 30.09.2017, prepared by the IA ArmInfo, the total capital of the banking system was 680.5 billion drams with annual growth of 17.8%, assets - 4.1 trillion drams with annual growth of 19%, liabilities - 3.4 trillion drams with annual an increase of 19.2%. In the structure of assets, the share of credit investments 64.2% or 2.6 trillion drams with annual growth of 18.7%, and The corporate portfolio increased by 17.6%, while retail sales grew by 14.4%. In the structure of common liabilities, term deposits accounted for 46.6% or 1.6 trillion drams (annual growth of 18.6%), demand liabilities - 23.9% or 822.8 billion drams (annual growth of 50.4%), and international borrowings (m / w loans) - 20.6% or 707.9 billion drams (annual decline of 1.4%). The income from lending increased by 11% (9 months in 2017 to 9 months of 2016), with the growth of time deposits and current accounts by 17.2%, and only for the III quarter, the income from lending decreased by 1.4% % with the growth of expenses on term deposits and current accounts by 13.1%. Net profit of the banking system increased by 69.8% on an annual basis, making 29.5 bln drams following the results of 9 months of 2017, of which 10.2 bln were provided for the third quarter with an increase of 18%. Ameriabank is the leader in terms of total capital, assets, loan portfolio (and corporate), investments in securities, general liabilities (both on demand deposits and international borrowings), occupies the 2 nd position in the authorized capital, net profit , The 3rd position on term deposits (but the second by term deposits of legal entities).

It should be noted that Ameriabank CJSC is a universal bank that provides investment, corporate and retail banking services in the form of a comprehensive package of banking solutions. The bank has been operating in the Armenian market since October 31, 1996. The branch network of Ameriabank today has 14 divisions: 8 - metropolitan and 6 - regional. As of October 1, 2017, the Bank's shareholders are Ameri Group with 65.8% equity interest, EBRD - 20.7% and ESPS Holding Limited - 13.5%.