CBA OFFICIAL: LEVEL OF COMPETITION IS NOT YET HIGH IN RA BANKING SYSTEM

Noyan Tapan
Sep 6, 2007

YEREVAN, SEPTEMBER 6, NOYAN TAPAN. The opportunities of attracting
external financial resources and the population’s savings by banks
for crediting, their use of advanced banking technologies will be some
factors of competition in the RA banking system in the next few years,
the head of the CBA Financial System Policy and Analyses Department
David Sargsian stated at the September 6 press conference. He said
that by estimates of the Central Bank of Armenia (CBA), the level of
competition is not yet high in the RA banking system.

According to him, the banks to succeed in obtaining easily
considerable financial resources in international markets will be in
a more advantageous position than those that will not have such an
opportunity or will obtain less resources.

The CBA official added that the growing Armenian economy’s increasing
demand for crediting will be met not only at the expense of foreign
financial resources but also savings outside the banking system. By
CBA estimates, they amount to 0.8-1 bln dollars.

According to him, big foreign banks that enter Armenia’s market of
banking services and use advanced technologies and "proven methods
of working with customers" will have big competitive advantages over
the bank operating with Armenian capital in this market.

D. Sargsian forecast that those Armenian banks that will not be able
to adapt to the changing environment will inevitably be acquired by
bigger banks. "The question is how long this process will take place –
two or five years. It will happen faster than many of us predict."