ArmInfo.The Armenian banking system's credit investments totaled AMD 3,900bln as of October 1, 2021, an annual increase of AMD 279bln or 6.7%. The third three-month period alone saw an increase of AMD 26bln or 0.7%, Arman Sargsyan, Deputy Managing Director of the Union of Banks of Armenia (UBA), told a news conference on Friday as he presented the results of the Armenian banking system's activities for Jan-Sept 2021.
He noted that lending of economy constituted 47% of the credit portfolio (AMD 1,800bln), individual loans 43% (AMD 1,600bln), and loans to financial organizations 10% (AMD 446bln). With higher activity in the agricultural and construction sectors, the period under review saw a 22% increase in mortgage portfolio (up to AMD 587.2mln), a 5.2% increase in lending of agricultural economic entities (up to AMD 186.7mln) and a 20.8% increase in lending of the construction sector (up to AMD 325.1mln).
With lending increasing, the Armenian banking system's assets showed a year-on-year increase of AMD 248bln or 3.7%, with an increase of AMD 115bln (1.7%) in the third three-month period alone, reaching 6,800bln as of October 1, 2021.
Mr Sargsyan also presented the deposit-related situation. Deposits showed an annual increase of AMD 145bln (3.9%), with an AMD 84bln (2.2%) increase in the third three- month period, reaching AMD 3,800bln. Residents' deposits showed an annual increase of AMD 295bln (11%), with an AMD 134bln (4.7%) increase in the third three-month period, reaching AMD 2,900bln as of October 1, 2021. On the other hand, nonresidents' deposits showed an AMD 149mln or 14.4% decrease, with a decrease of AMD 48bln or 5.1% in the third three-month period. According to Mr Sargsyan, not only the banking systems of a number of countries, including Armenia, report nonresidents' decreased share in deposits.
As regards the AMD and foreign-exchange components in deposits, the share of foreign- exchange deposits showed a decrease from 2009 to the end of the third three-month period of 2021 - from 73% to 51%. Correspondingly, the AMD component showed an increase from 27% to 49%. A similar situation was observed in the case of credit portfolio: the share of foreign-exchange loans decreased from 51% down to 46%, whereas that of AMD loans showed an increase from 49% up to 54%.
This Jan-Sept, the Armenian banking system's net profits totaled AMD 66.3bln - a year- on-year increase of 7.7bln or 13.1%, which, I turn, enabled the system to increase its total capital by AMD 37bln (4.2%). In this context, Mr Sargsyan pointed out the role of shareholders' investments in the capital increase.
In Jan-Sept 2021, the Armenian banks' total liabilities showed an increase of AMD 213bln (3.7%), reaching AMD 5,900bln, with an AMD 104bln (1.8%) increase recorded in the third three-month period.
Summing up the results, Seyran Sargsyan, UBA Managing Director, in the context of the Armenian banking system's activities during the COVID-19 crisis and 44-day war, pointed out the banks' prompt and selective responses. "Banks played a really significant role during that crucial and challenging period. By assisting individuals and legal entities, as well as by participating in a number of government support programs, banks made their great investment in ensuring the country's economic stability. Large-scale lending programs were implemented aimed to ensure economic growth and added value. Banks also managed, to an extent, to retain loan rates," he said. Moreover, banks also continue improving their online services by upgrading their technical provision and providing their clientele with safe online tools.
According to Mr Seyran Sargsyan, last year's challenges proved another piece of evidence that the banking system must constantly be ready for prompt response to crises by finding relevant solutions.
