Monday, April 22 2024 16:36
Karina Melikyan

Armenian banks` profit increased by 18.8% per annum in Q1 2024 thanks  to similar growth in loan portfolio

Armenian banks` profit increased by 18.8% per annum in Q1 2024 thanks  to similar growth in loan portfolio

ArmInfo.The net profit of Armenian banks increased in by 18.8% per annum Q1 2024  (after a 2.2-fold increase a year earlier), exceeding 83.1 billion drams ($211.4 million). It was possible to maintain the positive dynamics of net profit thanks to the acceleration of the y-o-y growth of the loan portfolio from 3.5% to 18.7%, ensuring a volume of 5.1 trillion drams ($13 billion), according to the data of the Express Ranking of Banks of Armenia on March 31, 2024, prepared by ArmInfo IC.  In Q1 2024 alone, the net profit of banks increased 5.6-fold, while a year earlier in the same period a meager quarterly growth of 1.5% was recorded, and in Q4 2023, the dynamics completely slipped to negative 35%.

 But it is worth noting that such a high increase in net profit on  quarterly terms, could not be due to the loan portfolio, since it  grew by 1.6% alone (against 3.5% growth for Q1 2023), in comparison  with which the growth investments in securities were more noticeable  - 7.8% (versus a 2.4% decline in the first quarter of  2023).investments in securities were more noticeable - 7.8% (versus a  2.4% decline in Q1 2023).

Notably, double-digit y-o-y growth in interest income continued with  a slight slowdown from 22.8% to 22.3%, while the slowdown in  non-interest income growth continued - from 11% to 8.1%. As a result,  the gap in favor of interest income increased to 3-fold from 2.6-fold  in Q1 2023. As a result, the dominance of interest income in total  income for the year increased from 71.3% to 74%, and the share of  non-interest income decreased from 27.3% to 25%.

According to ArmInfo analysts, the high y-o-y growth of the loan  portfolio is largely supported by the continued double-digit rates of  upward dynamics in consumer lending and mortgages, which were  observed in previous periods.

This growth in the loan portfolio kept assets in double-digit growth,  despite the slowdown in y-o-y rates from 18% to 11.5%, securing them  at the level of 9.4 trillion drams ($23.96 billion). In their  structure, the share of credit investments and other loans increased  from 51% to 54.3%. At the same time, the share of investments in  securities in assets decreased to 20.8% (from 21.8% a year earlier),  with a sharp slowdown in y-o-y volume growth from 38.6% to 6.6% - to  1.96 trillion drams ($4.99 billion).

Total liabilities have slowed down from 16.7% to 10.7% by April 1,  2024, exceeding 7.8 trillion drams ($19.9 billion). In their  structure, over 71.2% (versus 70.9% in 2023) or 5.6 trillion drams  ($14.2 billion) falls on liabilities to clients, and 24.9% (versus  25.2% in 2023) or 1.96 trillion drams ( $4.98 billion) - for  obligations to banks and other organizations (taking into account the  proceeds from the placement of corporate bonds), with a strong  slowdown in the y-o-y growth of the liabilities to clients from 30.5%  to 11.3% and an improvement in the dynamics of the liabilities to  banks and other organizations from 11.5% decline to a 9.7% growth. 

Moreover, such a sharp slowdown in the y-o-y  growth of liabilities  to clients is explained by the activity of immigrants, including the  opening of numerous accounts for certain transactions (movement of  capital and business).

"However, from the high tariffs for cards and for opening accounts  established then for non-residents, as well as the general increase  in commissions on financial transactions that are in effect to this  day, banks continue to receive serious income, thereby supporting the  growth of earned excess profits," ArmInfo analysts note.

Based on the results of Q1 2024, the TOP-5 in terms of assets  includes: Ardshinbank, Ameriabank, AMIO Bank (renamed  Armbusinessbank), Acba Bank and INECOBANK; in terms of credit  investments:  Ameriabank, Ardshinbank, Acba Bank, AMIO Bank and  INECOBANK; in terms of investments in securitie: Ardshinbank,  Armswissbank, AMIO Bank, Ameriabank and Converse Bank; in terms of  liabilities to clients: Ardshinbank, Ameriabank, Acba Bank, AMIO Bank  and INECOBANK; in terms of total capital - Ardshinbank, Ameriabank,  AMIO Bank, Acba Bank and INECOBANK.

AMIO Bank took the lead in the TOP-5 in terms of authorized capital;  Ardshinbank moved to 2nd place, displacing VTB Bank (Armenia) to 3rd  place, which in turn moved Acba Bank and Ameriabank to 4th and 5th  places. Only two banks replenished their authorized capital in Q1  2024 - Ardshinbank (by 96.17%) and Armeconombank (by 12.04%). 

The composition of the shareholders of Ameriabank also changed, the  majority shareholders of which were BOGG and Bank of Georgia,  affiliated with this group (a total of 90%), and therefore the share  of EBRD in the bank's capital decreased to 10%.

Ardshinbank holds the lead in terms of net profit for Q1 2024,    Ameriabank continues to occupy the 2nd place, INECOBANK is in the 3rd  place, and Acba Bank and Converse Bank are in 4th and 5th places,  respectively.

There are already 18 banks operating in Armenia, with a new  participant FastBank entering the banking market in November 2022,  including foreign subsidiaries of HSBC (Great Britain), VTB (Russian  Federation), Mellat (Iran), Byblos Bank (Lebanon). The international  institutional investor represented by the European Bank for  Reconstruction and Development (EBRD) is present in Armenia in the  capital of only one bank, Ameriabank. 

POST A COMMENT
Input digits     


News
Russian Deputy Premier: There are no problems in trade between Russia  and ArmeniaRussian Deputy Premier: There are no problems in trade between Russia  and Armenia
Converse Bank began issuing China UnionPay cards - UnionPay Gold and  UnionPay PlatinumConverse Bank began issuing China UnionPay cards - UnionPay Gold and  UnionPay Platinum
Rostelecom Armenia announced the beginning of rebranding and will henceforth operate under the new brand OVIORostelecom Armenia announced the beginning of rebranding and will henceforth operate under the new brand OVIO
Price index for industrial products in Armenia, began to rise amid  high growth in industrial productionPrice index for industrial products in Armenia, began to rise amid  high growth in industrial production
Team Telecom Armenia announces resumption of communication in  Alaverdi Team Telecom Armenia announces resumption of communication in  Alaverdi 
Armenia`s banking system starts active lending to economy and  populationArmenia`s banking system starts active lending to economy and  population
Civil society to supervise procurement contract execution Civil society to supervise procurement contract execution 
Government property management effective last year - minister  Government property management effective last year - minister  
Armenia bans export of scrap metal, metal goods Armenia bans export of scrap metal, metal goods 
AraratBank completes placement of bonds ahead of scheduleAraratBank completes placement of bonds ahead of schedule
Armenia`s NA discusses turnover tax rate rise Armenia`s NA discusses turnover tax rate rise 
Tree Planting Results with My Forest Armenia: The Power of One DramTree Planting Results with My Forest Armenia: The Power of One Dram
World Bank expresses readiness to help Yerevan develop solid waste  management policyWorld Bank expresses readiness to help Yerevan develop solid waste  management policy
Your home is in Armenia – Ameriabank offers mortgage loans for the DiasporaYour home is in Armenia – Ameriabank offers mortgage loans for the Diaspora
Armenia`s electric energy exports down last year; possible evidence  of decline in real economy - expert Armenia`s electric energy exports down last year; possible evidence  of decline in real economy - expert 
Ameriabank`s Trade Finance portfolio enriched with four prestigious awards from EBRD and IFCAmeriabank`s Trade Finance portfolio enriched with four prestigious awards from EBRD and IFC
On Oct 4- 7, Yerevan to host WCIT for second time On Oct 4- 7, Yerevan to host WCIT for second time 
Mirzoyan began his speech at International Conference on Nuclear  Security by expressing condolences to IranMirzoyan began his speech at International Conference on Nuclear  Security by expressing condolences to Iran
R&D is most important element of EAEU countries integration and  R&D is most important element of EAEU countries integration and  "entrance ticket" to competitive world - Russian economist
Armenia, EFSD sign agreement for USD 100 million financial credit Armenia, EFSD sign agreement for USD 100 million financial credit 
Armenia-UAE economic and technical cooperation commission to meet in  Abu Dhabi Armenia-UAE economic and technical cooperation commission to meet in  Abu Dhabi 
Team Solutions presents its ZangeZOR product at 4Future Banking int`l  forumTeam Solutions presents its ZangeZOR product at 4Future Banking int`l  forum
Armenia`s government plans to implement housing programme for  forcibly displaced people in next 10-12 yearsArmenia`s government plans to implement housing programme for  forcibly displaced people in next 10-12 years
Communications Museum re-opened in YerevanCommunications Museum re-opened in Yerevan
Double increase in turnover tax rate will stimulate transition to  common taxation system: Deputy MinisterDouble increase in turnover tax rate will stimulate transition to  common taxation system: Deputy Minister
Rocket Line - now for 60 months: Idram and IDBankRocket Line - now for 60 months: Idram and IDBank
Rising prices for services, going into shadows and closing businesses  - incomplete list of Rising prices for services, going into shadows and closing businesses  - incomplete list of "expectations" from revision of turnover tax  rate from SME Cooperation Association President
Liability for misrepresented information is proposed in ArmeniaLiability for misrepresented information is proposed in Armenia
Government proposes to make changes to car trade system within  Government proposes to make changes to car trade system within  "Trade-in" program
Armswissbank attracts us$ 10 million loan package from EBRD to support competitiveness and green transitionArmswissbank attracts us$ 10 million loan package from EBRD to support competitiveness and green transition
Armenian lawyers unwilling to pay taxes on universal basisArmenian lawyers unwilling to pay taxes on universal basis
EU Commissioner: EU will continue to contribute to economic  development of ArmeniaEU Commissioner: EU will continue to contribute to economic  development of Armenia
PM discusses opportunities for diversifying Armenian economy with WB,  IFC management PM discusses opportunities for diversifying Armenian economy with WB,  IFC management 
EBRD President considers programs implemented by Bank useful for  development of private sector in ArmeniaEBRD President considers programs implemented by Bank useful for  development of private sector in Armenia
EBRD lends up to US$ 10 million to Armeconombank for MSME on-lendingEBRD lends up to US$ 10 million to Armeconombank for MSME on-lending
Armenia benefits greatly from influx of capital and IT specialists -  EBRD chief economistArmenia benefits greatly from influx of capital and IT specialists -  EBRD chief economist
Finance Ministry, French Development Agency sign cooperation  agreement for 2024-2027Finance Ministry, French Development Agency sign cooperation  agreement for 2024-2027
Idram Junior and Koreez signed a memorandum of cooperationIdram Junior and Koreez signed a memorandum of cooperation
During the 33rd EBRD Business Forum, Ardshinbank hosted a panel discussion on economic and trade sanctions.During the 33rd EBRD Business Forum, Ardshinbank hosted a panel discussion on economic and trade sanctions.
Government to allocate additional AMD 3 billion to finance state  order for healthcareGovernment to allocate additional AMD 3 billion to finance state  order for healthcare
EBRD provides $10 million loan to ArmSwissBan to support  competitiveness and green transition of MSMEsEBRD provides $10 million loan to ArmSwissBan to support  competitiveness and green transition of MSMEs
Pankin: Armenia`s suspension of CSTO funding isn`t tragedyPankin: Armenia`s suspension of CSTO funding isn`t tragedy
Armenian government approves program for providing housing to  families from Artsakh; expenses estimated at  AMD 10-12 billion Armenian government approves program for providing housing to  families from Artsakh; expenses estimated at  AMD 10-12 billion 
EBRD Governors re-elect President Odile Renaud-Basso for second termEBRD Governors re-elect President Odile Renaud-Basso for second term
EBRD, USAID to develop transport infrastructure of Armenia,  Azerbaijan, Georgia EBRD, USAID to develop transport infrastructure of Armenia,  Azerbaijan, Georgia 
No specific dates for the entry into force of the law on compulsory  life insurance for tourists visiting Georgia - RA MFANo specific dates for the entry into force of the law on compulsory  life insurance for tourists visiting Georgia - RA MFA
Pashinyan: all those who have the necessary skills, abilities and  desire can make a profit in ArmeniaPashinyan: all those who have the necessary skills, abilities and  desire can make a profit in Armenia
Odile Renaud-Basso: Armenian economy continues to grow despite  numerous negative factorsOdile Renaud-Basso: Armenian economy continues to grow despite  numerous negative factors
Minister of Territorial Administration and Infrastructures refrains  from specifying North-South Road Corridor Investment Program`s  implementation costs and deadlines Minister of Territorial Administration and Infrastructures refrains  from specifying North-South Road Corridor Investment Program`s  implementation costs and deadlines 
EBRD improves Armenia`s GDP growth forecast for 2024 from previous  4.5% to updated 6.2%EBRD improves Armenia`s GDP growth forecast for 2024 from previous  4.5% to updated 6.2%
EBRD promises unprecedented investments in Armenian economyEBRD promises unprecedented investments in Armenian economy
FMO provided Ardshinbank with a guarantee for a credit portfolio of 20 million US dollarsFMO provided Ardshinbank with a guarantee for a credit portfolio of 20 million US dollars
Lending for construction of southern section of Sisian-Kajaran road  will be largest program ever implemented by EBRD in Armenia - Bank  President Lending for construction of southern section of Sisian-Kajaran road  will be largest program ever implemented by EBRD in Armenia - Bank  President 
French Development Agency, Armenian government to expand cooperation  areas and programs` scope French Development Agency, Armenian government to expand cooperation  areas and programs` scope 
The Power of One Dram Sums up the Two-Year Program with Teach for ArmeniaThe Power of One Dram Sums up the Two-Year Program with Teach for Armenia
Noubar Afeyan willing to use his potential to strengthen Armenia Noubar Afeyan willing to use his potential to strengthen Armenia 
Ministry of Economy of Armenia denies that growth in agricultural  exports is due to re-exportsMinistry of Economy of Armenia denies that growth in agricultural  exports is due to re-exports
Finance Minister: Armenia`s GDP generation growth potential increased  from 4-4.5% to 5.5-6%Finance Minister: Armenia`s GDP generation growth potential increased  from 4-4.5% to 5.5-6%
EBRD funds customs and logistics centre in SyunikEBRD funds customs and logistics centre in Syunik
Grigori Zakaryan: “Capital markets have a crucial for economic development.”Grigori Zakaryan: “Capital markets have a crucial for economic development.”
Read more


Exchange rates
29.05.2024
RUB4.32-0.06
USD387.50-0.53
EUR420.32-1.24
GBP493.91-1.02
CAD283.59-0.62
JPY24.64-0.10
CNY53.45-0.12
CHF424.29-0.39