ArmInfo. Unlike 2022, when the Armenian banking system received most of its profits from services provided to non-residents (accounts, payment cards, currency transactions, ed. note), in 2024 there is a serious demand for credit products, which will allow banks to more thoroughly generate profits. Governor of the Central Bank of Armenia Martin Galstyan stated during a press conference on October 31.
In particular, he noted that the market is experiencing healthy lending rates and a variety of loan products are offered. Mr. Galstyan said that by October, consumer loans to individuals increased by 18.9% per annum. "This is a very good, healthy indicator, which is conditioned by the continued growth of income in individual segments, as well as the natural growth cycle of industries," he said. At the same time, the head of the Central Bank drew attention to the fact that by October, deposits of residents grew by 25.2% per annum, and non-residents - by 16.8%.
According to the Express Ranking of Armenian Banks as of September 30, 2023, prepared by ArmInfo IC, the net profit of the banking system for 9 months of this year amounted to 215 billion drams ($546.4 million), having greatly stalled in y-o-y growth from 3-fold to 11%, while in Q3 it began to decline. And this is against the background of accelerating y-o-y growth of the loan portfolio from 1.7% to 20.5%, the volume of which reached 4.7 trillion drams ($12 billion), and growth continues to be supported largely by retail loans.
This improvement in lending dynamics greatly accelerated the y-o-y growth of interest income to 25%, while non-interest income dropped 2-fold, while a year earlier non-interest income showed a progressive growth of 4-fold, with a modest increase in interest income of 9.7% alone. And if interest income increased due to lending and transactions with securities, then a significant reduction in non-interest income was provoked by the inhibition of transactions with currency, money transfers and card transactions, which were very actively carried out by immigrants last year.
Within assets, the share of lending increased to 54%, and 74% of total liabilities are liabilities to customers (time deposits and demand deposits) - 5.3 trillion drams, with y-o-y growth rates from 16.2% to 23.3%.
