by Karina Melikyan
In Q1 2014 the net profit of Armenia's banking system dropped by 28.5% to 9.1bln AMD or $22mln. As compared with Q1 2013, the index grew by 6.7%.
According to the Express Ranking of Armenian Banks prepared by the Agency of Rating Marketing Information (ArmInfo), in Q1 2013 the index dropped by 37.3% due to slowdown in lending and the CB's decision to write off non-performing loans.
Likewise, this year's drop may have also been caused by declining lending activities. Unfortunately, the banks have not yet specified their lending risks, so, it is yet clear why the profit has dropped. In Q1 2014 the loans of Armenia's banks grew by 2.1% to 1.8tln AMD or $4.4bl. As compared with Q1 2013 they grew by 11.4%. Nostro account balance shrank by 10.1% in Q1 2014 and by 23.7% as compared with Q1 2013 to 227.6bln AMND or $550.7mln. Investments in securities grew by 9.1% and 20%, respectively, to 225.5bln AMD or $545.6mln. Assets dropped by 0.2% and grew by 14.4% to 2.9tln AMD or $7.1bln. Loans made up 61.4% of assets, nostro accounts 7.8%, investments in securities 7.7% against respective 63.1%, 7.2% and 7.3% in Q1 2013.
In Q1 2014 the obligations of Armenia's banks dropped by 0.8% to 2.5tln AMD or $5.9bln. As compared with Q1 2013 they grew by 14.2%.
The total capital grew by 2.5% in Q1 2014 and by 15.3% as compared with Q1 2013 to 481.6bln AMD or $1.2bln. Accumulated profit grew by 5% and 26.4%, respectively, to 170.2bln AMD, authorized capital by 2.7% and 7.5%, respectively, to 262.5bln AMD. In Q1 2014 only VTB Bank (Armenia) increased its capital (by 50.3%) due to issue of 7bln AMD worth of shares.
HSBC Bank Armenia, Ardshininvestbank and Ameriabank registered the biggest net profits, ACBA-Credit Agricole Bank, VTB Bank (Armenia) and Ardshininvestbank the biggest capitals, Ameriabank, VTB Bank (Armenia) and Ardshininvestbank the biggest assets, VTB Bank (Armenia), ACBA- Credit Agricole Bank and Ameriabank the biggest loan books, HSBC Bank Armenia, Armswissbank and Armbusinessbank the biggest investments in securities, Ameriabank, Ardshininvestbank and VTB Bank (Armenia) the biggest obligations.