Active lending policy enables Armenian banks to record 61% profit  rise 

ArmInfo. An active lending policy in 2024 allowed Armenian banks to ensure high profit growth. Thus, an increase in the loan portfolio by 25% - to 6.3 trillion ($ 15.8 billion) increased net profit by 61% - to 363.2 billion drams ($  915.8 million). This is evidenced by the data of the Express Ranking  of Armenian Banks as of 31.12.2024, prepared by ArmInfo Investment  Company.

It is noteworthy that in 2024, both retail and corporate lending grew  at almost equal double-digit rates.

This largely provoked a 20% growth in assets, reaching a value of  over 11 trillion drams ($ 27.8 billion).  But in their structure,  double-digit growth was also recorded in investments in securities -  by 17.3%, the volume of which exceeded 2.1 trillion drams ($5.4  billion). The share of the loan portfolio in assets increased to 57%,  and investments in securities - slightly exceeded 19%. However, even  with such lending activity, interest income increased moderately (by  16%). At the same time, non-interest income, mainly generated from  card transactions and money transfers, increased more significantly  (by 32%). While interest and non-interest expenses show equally  moderate growth, respectively, by 14% and 11%.

Total liabilities for 2024 increased by 20%, exceeding 9.2 trillion  drams ($23.3 billion). In their structure, 70% (6.4 trillion drams or  $16.2 billion) are liabilities to customers, and 25% (2.3 trillion  drams or $5.8 billion) are liabilities to banks and other  organizations (taking into account funds raised from the placement of  corporate bonds), with their annual growth of 16.4% and 21.1%,  respectively.

Total capital increased by 20.3% in 2024 - to $4.5 billion, which was  supported by the growth of both accumulated profit (by 27%) and  authorized capital (by 15%). Moreover, the authorized capital was  replenished in 2024 by five banks: Ardshinbank (by 96.2%), INECOBANK  (by 75.3%), Acba Bank (by 64.9%), Armeconombank (by 29.4%) and Fast  Bank (by 33.2%). In the TOP-5 by the size of the authorized capital,  the championship was secured by AMIO Bank, and the next four  positions were occupied by Ardshinbank, Acba Bank, VTB Bank (Armenia)  and Ameriabank.

As of the end of 2024, the TOP-5 by assets include Ardshinbank,  Ameriabank, Acba Bank, AMIO Bank and INECOBANK, by credit investments  - Ameriabank, Ardshinbank, Acba Bank, AMIO Bank and INECOBANK, by  investments in securities - Ardshinbank, Ameriabank, AMIO Bank,  ArmSwissbank and INECOBANK, by liabilities to clients - Ardshinbank,  Ameriabank, Acba Bank, INECOBANK and AMIO Bank, by total capital -  Ardshinbank, Ameriabank, Acba Bank, AMIO Bank and INECOBANK. In terms  of net profit for 2024, Ardshinbank holds the lead, Ameriabank is in  2nd place, INECOBANK is in 3rd, Acba Bank is in 4th and IDBank is in  5th.

In Armenia, with the emergence of a new participant in the person of  FastBank in November 2022, the number of banks reached 18. Later, in  2024, HSBC Bank Armenia merged with Ardshinbank (completed on  November 29) and was subsequently renamed Ardshininvestbank CJSC (a  subsidiary). Taking into account HSBC's exit from Armenia, there are  now three subsidiaries of foreign banks operating in the country's  banking sector: VTB (RF), Mellat (Iran), Byblos Bank (Lebanon). In  addition, the presence of international institutional investors,  represented by the European Bank for Reconstruction and Development  (EBRD) and the Asian Development Bank (ADB), which participated in  the capital of Ameriabank, has also decreased. In particular, with  the appearance of Bank of Georgia Group PLC (BOGG) and JSC Bank of  Georgia among Ameriabank's shareholders with a combined share of 90%,  the EBRD's share was reduced to 10%, and ADB left altogether.

(The calculated exchange rate of the dram against the dollar was  396.56 drams/$1 as of December 31, 2024).