ArmInfo.The banking system of Armenia increased its net profit in 2018 by 78.7% to 62.2 billion drams ($ 128.6 million), against a relatively modest growth in 2017 by 15.6%.
According to the Express Ranking of Armenian banks, prepared by ArmInfo IC, in quarterly terms, net profit continued to decline with the acceleration of the decline rates from 6.9% in the Q3 to 29.9% in the Q4. The deterioration in the dynamics was observed a year earlier, with the only difference being that net profit in the Q4 of 2017 fell by 14.2% from 18% growth in the third quarter of 2017. According to ArmInfo analysts, quarterly profit sinking is most likely due to continued write-offs of toxic loans from the balance sheets.
Accumulated profit of the banking system by January 1 of this year reached 176.5 billion drams ($ 364.9 million), expanding the vector of y-o-y dynamics from 14.3% decline in 2017 to 18.3% growth in 2018. This, coupled with the capitalization by four banks of the authorized capital, has accelerated the y-o-y growth of the total capital of the banking system from 4.6% to 11.3%, with an exit to the level of 771.1 billion drams ($ 1.6 billion). In particular, in 2018, VTB Bank (Armenia) replenished the authorized capital in the Q4, Ameriabank (in the Q1)Byblos Bank Armenia (in the Q4) and Armeconombank (Q2 and Q4), which ensured y-o-y growth of the total authorized capital of the system by 8.9%, and in the Q4 alone - by 5%, to 505.1 billion drams or $ 1.04 billion.
The standard total capital in the market average increased in 2018 by 4.7% to 42.2 billion drams ($ 87.3 million). Capital adequacy for the reporting year decreased from 33.23% to 29.92% on average. Top-5 total capital includes Ameriabank, Ardshinbank, ACBA-Credit Agricole Bank, INECOBANK and VTB Bank (Armenia). Of these banks, the top four lead the net profit. To note, since 2017, 17 banks have been operating in Armenia.