Continued lending activity allows Armenian banks to increase profits  at double-digit rates

ArmInfo.  The continued lending activity in the first quarter of 2025 has enabled Armenian banks to increase profits at double-digit rates. Thus, the growth in the loan portfolio by 28% per annum, reaching 6.5 trillion ($16.7 billion) has  contributed to a 21% annual increase in the total net profit of  banks, amounting to 100.6 billion drams ($256.9 million). This is evidenced by data from the Express Ranking of Armenian Banks as of 31.03.2025, prepared by ArmInfo Investment Company.

This significantly contributed to the annual growth of assets by  19.6%, reaching a value of 11.3 trillion drams ($28.8 billion).  Additionally,  growth was also recorded in investments in securities, increasing by 7% to a volume of 2.1 trillion drams ($5.4 billion). The share of the loan portfolio in assets increased to 58%, while investments in securities - slightly decreased to 19%. Despite the active lending, interest income increased at a more moderate rate (by 21%) compared to non-interest income (by 30%), mainly generated from  card transactions and money transfers. Interest and non-interest expenses both showed almost the same double-digit growth, with increases of 18% and 22% respectively. 

Total liabilities increased by 19.5% year-on-year, reaching 9.4  trillion drams ($23.9 billion). Within this structure, 68.4% (6.4  trillion drams or $16.4 billion) are liabilities to clients, and  25.4% (2.4 trillion drams or $6.1 billion) are liabilities to banks  and other organizations (taking into account funds raised from the placement of corporate bonds), with an annual growth of 14.8% and 21.7%, respectively. Total capital increased by 20.1% year-on-year to 1.9 trillion drams ($4.8 billion), primarily supported  by the growth of accumulated profit (by 35.3%) rather than the authorized capital (by 9.4%). 

Moreover, five banks have increased their authorized capital over the year: AMIO Bank (in Q1 2025 by 11.8%), INECOBANK (in Q2 2024 by 75.3%), Acba Bank (in Q4 2024 by 64.9%), Armeconombank (in Q2 and Q4 2024 by 15.5%) and Fast Bank (in Q2 2024 by 33.2%). AMIO Bank  secured the top position in the TOP-5 by the size of authorized  capital, followed by Ardshinbank, Acba Bank, VTB Bank (Armenia) and Ameriabank. According to the results of the first quarter of 2025,  Ardshinbank, Ameriabank, Acba Bank, AMIO Bank and INECOBANK lead  in assets,  in credit investments - Ardshinbank, Ameriabank, Acba Bank, AMIO Bank and INECOBANK, in security investments - Ardshinbank,  Ameriabank, AMIO Bank, ArmSwissbank and Converse Bank, in liabilities to clients - Ardshinbank, Ameriabank, Acba Bank, INECOBANK and AMIO Bank, in  total capital - Ardshinbank, Ameriabank, AMIO Bank, Acba Bank and INECOBANK. In terms of net profit for the same period, Ardshinbank is in the lead, followed by Ameriabank, Acba Bank,, INECOBANK and Evocabank. It should be noted that in Armenia, the number of banks reached 18 with the emergence of a new participant, Fast Bank, in November 2022. However, in 2024, the number of banks again decreased to 17, with the exit of HSBC.  In 2024, Ardshinbank absorbed HSBC Bank Armenia. Following HSBC's exit, there are noe three subsidiaries of foreign  banks operating in Armenia's banking sector instead of four:  VTB (RF), Mellat (Iran), Byblos Bank (Lebanon). The presence of international institutional investors in the capital has also decreased, with the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) reducing their shares in  Ameriabank, The Bank of Georgia Group PLC (BOGG) and JSC Bank of Georgia now hold a combined share of 90% in Ameriabank, the EBRD's share was reduced to 10%, and the ADB's share was zeroed out. (The calculated exchange rate of the dram against the dollar as of March 31, 2025 was AMD 391.57 /$1).