YEREVAN, December 23. /ARKA/. Armenia’s banking sector in the outgoing year has faced a string of serious challenges - slower economic growth, weak economic activity and the worsening solvency of the population have affected the main indicators of banks. At the same time the banks have managed to withstand the arising risks and take steps for improvement. In a bid to comply with new realities the banks have begun the process of replenishment of their authorized stock capital, seeking simultaneously new ways of development and shaping their own business models.

1. Consolidation of banks

The most important event of the year was consolidation of banks. On December 8 Armeconombank and Kazakh BTA Bank officially announced a merger. Two days later it emerged that Inecobank acquired 100% shares of ProCredit Bank, a subsidiary of ProCredit Holding AG&Co.KGa A. This deal was financed by a loan Incobank received from the EBRD. The consolidation of banks was spurred by the Central Bank’s decision to increase from 1 January 2017 the minimum amount of the total capital of commercial banks to 30 billion drams from the current 5 billion drams.

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