Moodys: In Armenia, the concentration of the largest deposits of an  average bank reaches 37%

ArmInfo. In Armenia, the share of the top 20 deposits is 37% of the average bank. Better the situation in Belarus (25%), Ukraine (23%), Russia (33%) and  Kazakhstan (35%). Worse situation in Uzbekistan (38%) and Azerbaijan  (60%).

As noted in the September 19 report of Moody's "Banks of the CIS: the  persisting high concentration in loans and deposits has a negative  impact on the creditworthiness of banks," deposit bases in banks in  Russia and the CIS are highly concentrated on a limited number of  customers. "This trend will continue in the medium term: the growth  of retail deposits will intensify against the background of the  restoration of real incomes of the population in some countries, but  in general the process of diversifying the deposit base will be  slow," the author of the report, Vice President, senior analyst at  Moody's Vladlen Kuznetsov .

This report also presents a study on the risks of concentration of  Russian and CIS banks on the largest borrowers. As the authors of the  study note, on average, the share of the top 20 loans in the CIS is  41% of all loans issued by banks, and this level, despite the decline  in recent years, is still high. In Russia, this indicator is about  44% and about the same concentration in Belarus. It is worse only in  Ukraine - more than 50%. The smallest share of the largest loans was  distinguished by Kazakhstan - less than 30%.

"The high concentration of the loan portfolio negatively affects the  creditworthiness of banks, as it increases the risks of credit  losses, which can adversely affect capital," says the author of the  report, vice president and senior analyst at Moody's agency Vladlen  Kuznetsov. "It also increases the likelihood of a decline in cash  flow, which can lead to a reduction in revenue and profitability and  have a negative impact on the liquidity indicators of the bank. "

"The level of concentration of loan portfolios can in fact be  undervalued relative to the real level, because in order to meet  regulatory requirements, banks can split a large loan into several  parts, indicating them as loans to different companies. In addition,  regulators in most CIS countries use unconsolidated data for the  purpose of supervising the risks of lending to related parties.This  allows banks not to indicate in the reporting major credit risks, "-  noted in the report Moody's.

It should be noted that only 17 banks operate in Armenia. According  to the data of 2018, Moody's evaluates 7 banks in Armenia:  Ardshinbank ("Ba3"), Bank VTB (Armenia) ("Ba3"), Ameriabank ("B1"),  Converse Bank ("B1"), IDBank ("B1" ), Armeconombank ("B1") and  Unibank ("B2"). Moody's retained its sovereign rating at "B1",  improving the outlook from "stable" to "positive".

According to the Financial Rating of the Armenian Banks as of July 1,  2018, the volume of credit investments of the banking system exceeds  3 trillion drams ($ 6.3 billion), term deposits - 1.8 trillion drams  ($ 3.6 billion) and call deposits - 810.3 billion drams ($ 1.7  billion) ). With an annual growth in the loan portfolio by 10.7%,  term deposits grew by 2.7%, and demand liabilities - by 9.6%. The  banking system of Armenia completed the first half of 2018 with a net  profit of 36.3 billion drams ($ 75.3 million), ensuring the annual  growth of this indicator by 2 times.