ArmInfo.On March 29 Fitch Ratings has affirmed ACBA- Credit Agricole Bank CJSC's (ACBA) and Ardshinbank's (Ardshin) Long-Term Foreign- Currency Issuer Default Ratings (IDRs) at 'B+' with Stable Outlooks. Fitch informs, noting in the report that the IDRs and senior debt ratings of both banks are driven by their intrinsic strength, as captured by their 'b+' Viability Ratings (VRs).
The affirmation of both banks' VRs reflects limited changes in their credit profiles since the previous rating actions a year ago. The VRs continue to reflect a cyclical local economic environment, which translates into potentially vulnerable asset quality, and high dollarisation. The VRs also capture the banks' stable asset quality, supported by a cyclical upswing of the economy, reasonable capital and liquidity buffers and moderate profitability.
The banks' Support Rating Floors of 'No Floor' and Support Ratings of '5' reflect Fitch's view that the Armenian authorities have limited financial flexibility to provide extraordinary support to banks, if necessary, given the banking sector's large foreign-currency liabilities relative to the country's international reserves.
CJSC "Ardshinbank" was founded in 2003. In December 2016, Areximbank-Gazprombank Group merged with Ardshinbank. According to the total number of branches (64) and the number of regional divisions (42), Ardshinbank holds the 2nd position. The major shareholders of Ardshinbank as of January 1, 2019 are LLC Arins Group (this is renamed LLC Center of Business Investments) -67.97% and Industrial and Financial Corporation REGION CJSC (RF) - 29.52%.
"ACBA-Credit Agricole Bank" CJSC has been operating in Armenia since 1995. The branch network of the Bank consists of 59 divisions, of which 18 are located in Yerevan, and 41 - in the regions of Armenia. The majority shareholders of the bank as of January 1, 2019 are SJSC "Sacam International" (a member of Credit Agricole S.A) - 6.48% and ACBA Federation CJSC - 93.52%.
According to the Financial Ratings of Banks of Armenia, prepared by the IC ArmInfo, Ardshinbank and ACBA-Credit Agricole Bank are in the TOP-5 in terms of credit investments. ACBA-Credit Agricole Bank is the traditional leader in agribusiness lending - over 33% of the bank's loan portfolio, about 30% focused on consumer loans, and almost 20% on SME loans. And Ardshinbank has over 27% of the portfolio, which are loans to the industrial sector, more than 22% - consumer loans, about 19% - SME loans, and slightly more than 12% - catering and services. 2018 Ardshinbank completed with a net profit of 8.2 billion drams (2nd position) with a y-o-y growth of 48.6%, and ACBA-Credit Agricole Bank with a profit of 6.98 billion drams (4th position) with a y-o-y growth of 25, 5%.