Armenia’s banks end 2015 with AMD 18.2 billion profits in 2015 showing 12.3% growth

25.01.2016 20:51
Armenia’s banks end 2015 with AMD 18.2 billion profits in 2015 showing 12.3% growth

YEREVAN, January 25. /ARKA/. Armenia’s banks earned AMD 18.2 billion in net profits in 2015 against AMD 16.2 billion in 2014 showing 12.3% growth, according to a fresh issue of ARKA News Agency’s ‘Banks of Armenia’ Bulletin.

Of the 21 banks operating in Armenia, 16 ended the ear with profits totaling AMD 29.5 billion against AMD 37.4 billion in 2014, while the remaining five sustained losses amounting to AMD 11.3 billion against AMD 21.6 billion.

ARKA News Agency’s analysis shows that loss-making banks sustained 47.7% less losses in 2015 than before, and profit-gainers enjoyed 21.1% less profits in 2015 than before.

Remarkable is that only four of the 16 profit-gainers built up their profits in 2015, and of only two of four unprofitable banks had their losses reduced.

Armenian banks’ aggregate profits shrank 53.3% in Jan-Sep 2015 to AMD 13.1 billion. Seven banks sustained losses at the mentioned period.

The indicators dropped mainly in the first quarter of 2015, when impacts from devaluation of the Armenian dram in late 2014 was still strong.

Banks’ profitability was also affected by economic situation in the country, the tightening of capital norms by the central bank and some risks at the financial market.

According to Moody’s Investors, Armenian banks will face difficulties in 2015 and 2016 because of Russia’s recession.

Analysts say Armenia’s highly dollarized banking sector will face a heavier pressure on quality of assets, if the national currency continues its downward motion.

Fitch Ratings, taking into account a weak operational environment and some slowdown in economic growth along with pressures coming from devaluation of the national currency and high interest rates, gave ‘negative’ outlook to Armenia’s banking sector for 2016.

ARKA News Agency’s analysts think the outlook revision needs prospects for stable development resulted in stabilization of assets’ quality and weaker pressures on banks’ capital and restoration of their liquidity. ---0----

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