ArmInfo. The level of capital adequacy of the Armenian banking system declined in 2017 from 38.8% to 33.2% (with the required minimum of 12%). According to the Financial Rating of the Banks of Armenia, prepared by NA ArmInfo, this is due to a sharp slowdown in the annual growth of both total capital - from 32% to 5.8% and assets - from 24.1% to 6.7%.
(Nostro) from 38.6% to 0.5%, in parallel with which the growth of investments in securities dropped sharply from 72.2% to 22.3% and in precious metals from 77.6% to 23.1%, as well as fixed assets and intangible assets - from 15.6% to 7.9%, against which the yield of cash dynamics from a 9.4% decline to 7.9% growth looks too modest. And the dominant article - loan investments slowed growth moderately - from 14.8% to 10.2%. Moreover, in the loan portfolio, the activation of retail was accompanied by a decline in corporate lending. In particular, retail lending improved dynamics with the exit from the 2.7% decline to 15.4% growth, while the corporate one, on the contrary, worsened - from 29.5% growth to 0.4% decline.
According to analysts of the rating agency AmRating, the slowdown in the growth of banks' capitalization and asset growth with the completion by early 2017 of the process of replenishment of capital to a regulatory minimum of 30 billion drams. The capitalization process in early 2017 led to an increase in the excess liquidity indicator, which by the end of the year began to decline gradually due to a sharp slowdown in the growth of total liabilities from 22.7% to 6.8%, in particular, the obligation to receive - from 23.7% to 18 % and time deposits - from 22.6% to 6%.
As a result, the level of total liquidity on average in the market declined to 35.99% in 2017 (with the required minimum of 15%), and current liquidity to 222.42% (with the required minimum of 60%), against 37, respectively, 55% and 253.83% in 2016. According to experts, this situation can be viewed as a positive trend, as evidenced by a sharp increase in retail lending. However, failure to follow the general trend of lending to the corporate sector can be viewed as a short-term hitch in anticipation of growth, adequate to the general economic trend, namely in the economic sphere in the country by 7.7%. Support for the fossil market at 6%.
ROA - from 0,96% to 0,9% and ROE - from 5,76% to 5,6%. Moreover, a meager decrease in these indicators was provoked by a moderate slowdown in net profit growth to 15.6% in 2017 from 26.8% in 2016 against a sharp slowdown in total capital and assets. The main reason is due to low interest rates, the presence of excess liquidity and, so far, a restrained pace of credit market recovery.
In terms of capital adequacy, the annual decline was recorded in 11 banks, the level of total liquidity was in 10 banks, current liquidity level was in 14 banks, ROA in 7 banks, ROE in 6 banks. The regulatory total capital on the market slowed down the annual growth rate to 10.5% from 40% in 2016, but the decline in this indicator was recorded only by two banks, and insignificant, and the other 15 significantly accelerated the growth rate of 3 banks against a sharp slowdown in growth the majority.
As of January 1, 2018, the assets of the banking system amounted to 4.4 trillion AMD ($ 9 billion), total capital - 701 billion AMD ($ 1.4 billion), total liabilities - 3.7 trillion AMD ($ 7.6 billion). In the structure of assets, credit investments amounted to 2.9 trillion drams ($ 6 billion) invested in securities - 558 billion AMD ($ 1.2 billion), balances on correspondent accounts in the Central Bank - 481.9 billion AMD ($ 995.5 million), Cash - 125 billion ($ 258.1 (nostro) - 80.5 billion ($ 166.3 million), investments in precious metals - 987.1 million ($ 2.1 million), fixed assets and intangible assets - 117.9 billion ($ 243.6 million ) In the structure of liabilities, term deposits amounted to 1.3 trillion ($ 2.7 billion) and call deposits - 834.7 billion ($ 1.7 billion). 2017 the banking system of Armenia is completed familiarize with a net profit of 38.3 billion ($ 79.1 million).
17 banks operate in Armenia since 2017, and their branch network includes over 520 units, of which about 230 are metropolitan, more than 260 are regional and more than 30 are located in the NKR.