Banking Activity against the Background of Economic Inactivity
Armenia’s trade banks have already released interim reports for the first quarter of 2016, which reveals growth in almost all directions. For those interested in the banking system, present-day crucial issue is which banks correspond to the new claim of the Central Bank of Armenia (CBA). This refers the total of common (normative) capital. Note, CBA increased the minimal size from AMD 5 billion to AMD 30 billion, and current banks should before 1 January 2017 either fit their normative capital to the new demand, or merge (be sold) with other banks, or turn into loan enterprises. 5 of the 21 operating banks corresponded to the AMD 30 billion threshold: Ameriabank, ACBA-Credit Agricole Bank, VTB Armenia, Ardshininvestbank and HSBC Armenia. After concluding 2015, Inecobank also joined them (which purchased ProCredit Bank last year). And in 2016, number of banks, overcoming CBA threshold was added by one more: ArmSwissBank reached its normative capital to AMD 30.3 billion. Armbusinessbank is also close to it—AMD 25.7 billion.
As for private capital, the snapshot is almost the same, Ameriabank (AMD 60.6 billion private capital) holds the leading position, which is followed by ACBA-Credit Agricole Bank (AMD 57.5 billion) and HSBC Armenia (AMD 54 billion).
To conclude, general capitalization of the abovementioned 20 banks throughout the first quarter of 2016 has grown by AMD 16.4 billion (3%) and comprised AMD 562.2 billion. For the time being the largest authorized capital is possessed by VTB Armenia Bank—AMD 37.8 billion.
Assets of Armenia’s trade banks have also increased during the year. Total assets of the observed 20 trade banks in the end of the first quarter of 2016 comprised AMD 3 trillion 498.5 billion, which is more by AMD 12.2 billion as compared to the beginning of the same quarter (0.4%).
Leader by asset volumes is Ameriabank (AMD 507.7 billion), which is followed by Ardshininvestbank (AMD 461.1 billion) and VTB Armenia Bank (AMD 314.8 billion). In percentage the biggest growth of assets throughout the quarter was recorded by Ardshininvestbank (15.1 %), and the biggest decrease—by BTA Bank (19.8%).
The first quarter of the year was not bad regarding profit as well. 16 out of 20 banks functioned with profit in the first quarter of 2016. The biggest income was recorded by ACBA-Credit Agricole Bank, Ardshininvestbank, Inecobank and Ameriabank (AMD more than 1.1 billion each). The greatest loss was recorded by Areximbank—AMD 2.9 billion.
In total, benefit of the 20 banks throughout the first quarter of 2016 comprised AMD 3.1 billion, which exceeds last year’s index for the same period by AMD 1.9 billion or 60%.
And what’s the situation like regarding allocation of loans and deposits? It should be noted that both loan and deposit portfolios in the period of the quarter have grown. Moreover, the deposits have increased more, than loans.
Total loan portfolio of the abovementioned 20 banks in the end of the first quarter of 2016 comprised AMD 2 trillion 144.2 billion, which exceeds last year’s index by AMD 30 billion or 1.4%.
Total of the deposit portfolio (liabilities of banks before its customers) has grown by AMD 48.8 billion or 2.6% throughout the quarter and reached AMD 1 trillion 930.1 billion.
Among the observed 20 banks the largest loan portfolio is possessed by Ameriabank—AMD 311.9 billion. Ardshininvestbank and Armbusinessbank are its followers. As compared to the beginning of the year (in percentage) the biggest loan portfolio growth was recorded by Mellat Bank (10.2%) and Ardshininvestbank (10.1%). Loan portfolio was most decreased in BTA Armenia Bank—by 17.4%. regarding deposits leaders are the same. Ameriabank is the first—AMD 288.8 billion or 15%. Index of Ardshininvestbank comprises AMD 259.8 billion for the first quarter, and that of Armbusinessbank—AMD 195.4 billion. As compared to the beginning of the year (in percentage) the biggest growth of deposit portfolio was recorded by Ardshininvestbank—27.3%. The lowest index belongs to ArmSwissBank—20.2%. Note, indices for ProCredit Bank aren’t included, as they’re reflected in the report of Inecobank.
By Babken Tunyan
