ArmInfo. The HSBC group has been moving its capital and focusing on its preferred markets, as has been the policy in recent years. Only since 2021, as noted by the Chairman of the Union of Banks of Armenia (UBA) Daniel Azatyan during a press conference, the Group has withdrawn from 7 countries, including retail lending in France, the USA, Greece, etc.

ArmInfo. The likelihood of attracting a new international brand to the Armenian financial market  is quite low. Economist Haykaz Fanyan expressed a similar opinion on his Facebook page, commenting on the HSBC's withdrawal from Armenian market.

ArmInfo. Armenian banks are reviving their credit policy after "resting on immigrants' laurels".  This must be done quickly and competently in order to maintain profit growth and avoid its serious decline.

ArmInfo.

ArmInfo. The profit growth rates of Armenian banks slowed down significantly amid the ongoing serious slowdown in lending to the economy. Thus, the net profit of Armenian  banks increased by 24.8% per annum inH1 2023 (against a 2.8-fold jump  in the same period in 2022), reaching 73.6 billion drams ($367.8  million), while slowing down strongly in quarterly growth from  3.4-fold to 5.2% alone.

ArmInfo.

ArmInfo.

ArmInfo.The upward trend in real estate prices and rising interest rates will reduce the pace of mortgage lending growth. This is the opinion of the analysts of the  AmRating National Rating Agency affiliated with ArmInfo, referring to  the extremely high growth rates of the mortgage market, which reached  42% in y-o-y terms.

ArmInfo.In Armenia, leasing transactions are rapidly gaining momentum, the total volume of which by April 2022 exceeded 64 billion drams ($132 million), having  increased by 38.4% year-on-year. This is evidenced by the data as of  March 31, 2022 of the "Financial Rating of Banks of Armenia" and  "Ranking of Credit Companies of Armenia", prepared by ArmInfo IC.

ArmInfo.Armenia has entered a stage of lending stagnation. Evidence thereof is a considerable increase in bank profits due to highly active foreign exchange and  securities transactions rather than due to the major income item,  lending.

ArmInfo.In Q1 2022, the inflow of transfers from individuals to Armenia increased by 38.2% per annum or by $155 million, reaching $561 million, Deputy Executive Director  of the Union of Banks of Armenia Arman Sargsyan said during a press  conference on May 13.

ArmInfo.Despite the fact that Armenia is now seen as a "safe haven" for the relocation of a considerable number of small and medium-sized businesses, especially in the field of IT, the aggravation of the external background associated with sanctions  restrictions could create serious problems in the medium term.

ArmInfo.The forecasts of international organizations and rating agencies on the growth of the Armenian economy in 2022 (1.5 -1.6%) are theoretically correct and sustained,  but at the same time they do not fully take into account the changing  structure of the Armenian economy, namely, the process of transition  from the so-called demand economy to the supply economy, albeit with  weakly expressed characteristics.

ArmInfo. The accelerated growth of non-performing loans (NPL) continues in the banking system of Armenia, pushing profit, and thereby depriving capital buffers of  the opportunity to replenish.

ArmInfo.In Armenia, fees on travel insurance reached a significant 70% growth in the first half of 2021 (from a significant 46.4% decline a year earlier), reaching a  volume of 235.9 million drams ($ 475.8 thousand). Such growth,  associated with some activation of outbound tourism, allowed not only  to approach the volume of two years ago, but also to return the 1%  share of travel insurance in the total portfolio of premiums.

ArmInfo.The high growth of the mortgage portfolio by June 2021 by 37.2% per annum to 544.2 billion drams ($ 1.05 billion) supported the loan portfolio of the Armenian  banking system in 6.4% growth, exceeding the absolute value of 3.6  trillion drams ($ 6.9 billion). The growth of mortgages increased its  share in the total loan portfolio of banks from 11.7% last year to  the current 15.1%. This is evidenced by the data of the RA Central  Bank.

ArmInfo. The risks of an outflow of funds against the background of the crisis, associated with the uncertainty of the timing of overcoming the coronavirus pandemic, and domestic and foreign policy shocks, predetermined the steps of the  Central Bank of Armenia to take early proactive measures to  neutralize short-term and long-term shocks of liquidity of the  financial system.  As part of these measures, the Central Bank of  Armenia is introducing new prudential liquidity ratios recommended by  Basel III - short-term (LCR - Liquidity Coverage Ratio) and long-term  (NSFR - Net Stable Funding Ratio). Corresponding additions have  already been made to Regulation 2 of the Central Bank of the Republic  of Armenia "On regulation of banking activities and applied economic  standards". 

ArmInfo.In the banking system of Armenia, the accelerated growth of non-performing loans (NPL) in 2020 continued in Q1 2021. In such a situation, the "indulgences"  undertaken by the regulator to shift part of the burden of bad loans  from 2020 to 2021 are likely to weigh down the already toxic loan  portfolio, as a result of which profits will linger in the downturn.

ArmInfo. For the first time in the business history of Armenia, on May 21, Yerevan will host an international conference dedicated to the formation of a corporate governance system "Modern trends in corporate governance: International experience and Armenian  reality" under the slogan "Integration, Trust, Investments".

ArmInfo. MP from the Prosperous Armenia faction Mikael Melkumyan considers the proposal of the leader of the party Gagik Tsarukyan to "nullify" citizens' loans in the  amount of up to AMD 3 million as appropriate and topical. "The  proposal passed an expert discussion at the highest level, and the  comment of the head of the Central Bank, perhaps, confirms that it is  justified," Melkumyan said on May 5 in an interview with reporters.