Over 150 million euros invested in Armenia’s financial sector in 12 months, central bank chairman

22.01.2016 13:13
Over 150 million euros invested in Armenia’s financial sector in 12 months, central bank chairman

YEREVAN, January 22. /ARKA/. Over 150 million euros have been invested in Armenia’s financial sector in 2015 and early 2016, the chairman of the Central Bank Arthur Javadyan said on Thursday.
According to him, there are no small and sick banks in the country and the consolidation of some banks is already showing positive results.

Javadyan said it is difficult to predict how many banks there will be by the end of the year, stressing that their number will definitely be less 21, as one merger has already begun and another one was announced.

"I am confident that there will be new mergers and that will have a positive impact on the banking sector and especially on consumers of banking services, since the presence of stable, healthy and financial institutions is an important guarantee of the stability of the whole system," said Javadyan.

The banks’ total assets in January-September 2015 fell by 2.1% from the beginning of the year to 3.318.3 trillion drams. Their liabilities declined by 3.6% to 2. 807 trillion drams and their lending fell by 4.3% to 2.074 trillion drams. However, their capital increased by 7.2% to 511.3 billion drams.

The major drop in the banks’ performance indicators occurred in the first quarter of the past year, when the impact of the sharp devaluation of the Armenian dram at the end of 2014 was still strong. Other factors affecting the drop in the banks’ profits are the overall economic situation, the regulators’ decision to raise the minimum total capital of banks and the risks in the financial market.

According to a Moody’s report in July, Russia’s recession and the decline in global oil prices will affect banks across six CIS countries in 2015-16, including Armenian banks, which will be affected moderately, reflecting the relatively modest devaluation in the dram, but its highly dollarized banking sector will face increased asset quality pressure if the dram continues to depreciate. -0-

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