Assets of Armenian banking system approach $ 12 billion

ArmInfo. The assets of the banking system of Armenia slowed down annual growth from 16.1% to 15.3%, amounting to 5.9 trillion drams ($ 11.7 billion) as of April 1, 2020.  According to the Express-Ranking of Banks of Armenia, prepared by ArmInfo IC, in their structure credit investments and other loans  reached 3.8 trillion drams ($ 7.5 billion), with annual growth  accelerating from 16.2% to 20.4%.

In assets, the share of credit investments and other loans increased  in annual terms from 61% to 63.7%, while a decrease in the share was  observed for investments in securities - from 12.8% to 12.1% and  nostro accounts and interbank investments - from 21.2% to 18.6%.

Bank investments in securities slowed annual growth from 11% to 9%,  amounting to 715.4 billion drams ($ 1.4 billion). And nostro accounts  and interbank investments, having experienced a more significant  slowdown in annual growth - from 18.2% to 1.3%, could not move from  the level of 1.1 trillion drams ($ 2.2 billion).

In TOP-5, Ameriabank, Ardshinbank, Armbusinessbank, ACBA-Credit  Agricole Bank and INECOBANK secured assets, 56.5% of the total assets  of the banking market (versus 55.8% a year earlier), with more than  43% concentrated in the first triples. These same banks are among the  top five in credit investments, covering almost 61% of the total  market, and again, with the dominant among the top three - 46%.   Armswissbank holds the lead in investments in securities, while  Ameriabank and Ardshinbank hold the second and third positions, and  TOP-3 accounts for about 41% of total investments in securities, with  the leader covering over 21%.

According to the analysts of the National rating agency AmRating, too  restrained dynamics of highly liquid assets, while slowing down the  growth rate of total assets and liabilities on demand, further  reduced the levels of general and current liquidity. In particular,  the total liquidity level on average in the market declined year on  year from 31.95% to 31.57% (with a regulatory minimum of  15%), and current liquidity - from 176.88% to 170.80 % (with  a regulatory minimum of 60%).

The interest income of the banking system, the lion's share of which  is formed from loans, slightly accelerated annual growth - from 12.7%  to 15.3%, amounting to 117.4 billion drams ($ 232.7 million). At the  same time, the annual growth of non-interest income, formed mainly  due to card transactions, money transfers and distance services,  accelerated more significantly - from 4.1% to 26.3%, with reaching  the level of 25.9 billion drams ($ 51.4 million).

Interest expenses, almost maintaining the annual growth rate of 10.2%  against 10.4% a year earlier, amounted to I quarter of this year.  58.5 billion drams ($ 116 million), while non-interest expenses  accelerated growth from 10.9% to 15.7%, amounting to 42.7 billion  drams ($ 84.6 million). As a result, total revenues slowed down  annual growth from 9% to 0.9%, but a reversal in the dynamics of  total expenditures from ascending 14.4% to descending 5.1% allowed  retained earnings to leave the 14.5% decline by 36.2 % growth. But  only in the 1st quarter of 2020, book profit recorded growth of only  7.1% (against 21.1% quarterly growth a year earlier), with a more  modest subsidence of total revenues than total expenses - 12.7%  versus 16.5%.

It should be noted that in Armenia, as part of preventing the spread  of the coronavirus pandemic, a state of emergency was introduced from  March 16, which will last until June 13. In the first month of the  emergency, a temporary ban was imposed on many types of economic  activity, but in the middle of April a softening ensued, and from May  18 the ban was lifted subject to mandatory precautionary measures.  Banks, in anticipation of the state of emergency, from March 13  announced a 2-3-month credit vacation for both individuals and  business entities, while at the same time urging customers to use  remote service systems. In addition, banks actively participated in  anti-crisis programs aimed at both social support of citizens and  assistance to a vulnerable category of business entities.