BANKING SYSTEM OF ARMENIA IS ONE OF MOST DEVELOPED SPHERES OF COUNTRY’S ECONOMY

ArmInfo
2007-06-25 20:44:00

The banking system of Armenia is one of the most developed spheres
of the country’s economy, Chairman of the Union of Banks of Armenia
Stepan Gishyan said today at the annual meeting of the Union.

He said that the average annual growth of Armenia’s banking system
makes up 20-24%, while the country’s economic growth makes up
10-12%. Nevertheless, he said, the level of penetration of the
banking system into the country’s economy is still low. "If the
specific weight of the total size of deposits of physical persons
in GDP does not exceed 50%, this indicator in Armenia in 2006 made
up 5,4% in all", he said. S. Gishyan noted that the Union of Banks
welcomes all the steps of the commercial banks aimed at the opening
of branches in the country’s regions and extension of the sector of
banking services. "However, presently, the work aimed at increase
of the level of penetration of the banking system into economy is
yet unsatisfactory. In view of this, its is necessary to join the
efforts of the government, the parliament and the whole society for
the available monetary flows to be directed to the banking system,
that will allow to lessen the shadow economy", Gishyan said.

He informed that the country’s commercial banks over the last 3 years
assured high level of profitability. He said that the last year was
successful for all 21 commercial banks of Armenia, that is confirmed
by good final indictors. He also said that all the banks completed
the year 2006 with profit and the total indicator of the net profit
made up 17 bln drams.

In 2006, the assets of 21 commercial banks grew by 20% to 544.2 bln
drams by Jan 1, 2007. The volume of credit investments grew by 21,23%
to 254.5 bln drams. He added that long with growth of the assets,
liabilities of the country’s commercial banks grew by 18,35% to
424.1 bln drams, the volume of deposits with fixed period, attracted
from the physical and juridical persons, exceeded 150 bln drams. The
authorized fund of the commercial banks for 2006 grew by 32,8%, while
the fund of the total capital – by 26,54% to 80,1 and 120,1 bln drams,
respectively. By S. Gishyan’s forecasts, these indicators in 2007 will
much exceed those of 2006. "Use of the Diaspora’s financial potential
may contribute to the growth of Armenia’s banking system and it is
necessary to develop special programmes for its attraction", he said.

According to S. Gishyan, every commercial bank of Armenia strives
to meet the international standards as to closer unit with the
international banking system. "The banking system of Armenia has
reached much over its 16-years of existence. Of course, there were
some omissions, however, the banking system takes the lead over the
banking systems of CIS countries by a number of indicators. It does
not even yield to the banking systems of many developed countries,
which have a 100-year-old history", he emphasized.

S. Gishyan thinks that competition among the presently functioning
commercial banks of Armenia is growing, as a result of which quality of
the banking service continuously improves, new banking technologies,
services and financial tools are implemented, the credit interests
rates are reduced.

"The principles of corporate management are implemented in RA
commercial banks, all the banks work with the shareholders, the state
control agencies, the Central Bank, the Tax Service and the public,
assuring the maximum transparency", S. Gishyan said. He added that
the assets of the commercial banks have a great liquidity and are
characterized by high level of diversification.