The Rating Agency AmRating/GlobalRating has issued a new report on the
Armenian Banking System Transparency. Attractiveness. Funding Scarcity.
2008-01-28 14:46:00
ArmInfo. The Rating Agency AmRating/GlobalRating has issued a new
report on the Armenian Banking System Transparency. Attractiveness.
Funding Scarcity.
GlobalRating Group press-service reports AmRating states that the
Armenian banking system is in an intensive development phase and has
drawn a lot of attention from foreign investors. Developed legislature,
strict prudential regulation, increasing competition and scarcity of
resources are conducive to the development of good corporate governance
standards, the accumulation of management experience, lowering
corruption and lower non-financial risks. Because of the strict
prudential monitoring and regulation by the Central Bank of Armenia,
commercial banks are in line with recent international trends and
moving towards Basel II standards. Liquidity and capital adequacy
measures are quite high, and the percentage of officially overdue loans
on the books is insignificant.
"The low politicization of the Armenian banking system is a positive
development. Its exposure to political risk is minimal, making banks
comparatively immune to potential shifts in the power structure,
lowering the overall country risk,”- said Executive Director Emmanuel
Lazarian.
Despite the fact that most of the recent investors in the market for
banking services have been members of the Armenian Diaspora (both pre-
and post-Soviet waves) who carry little weight in political circles,
new non-resident institutional investors who may have specific
strategic goals are entering the market.
Interest from foreign investors in the controlling banks’ stakes raises
questions as to whether Armenia’s banking system will remain "national"
in character or will be controlled by foreign strategic investors.
In order to avoid the latter under conditions of scarcity of funding
resources, the regulator’s idea of attracting capital by entering DPOs
and then IPOs is gaining momentum.
Analysts at AmRating/GlobalRating recognise the main development
strategies for the Armenian banking system in general and commercial
banks in particular as: 1. Increased capitalization. 2. Solving the
problem of a scarcity of long-term resources. 3. Preparation for the
gradual transition towards Basel II principles. 4. Expanding the range
of offered services. 5. Regional Expansion
The Global Rating Group – a family of rating agencies. The rating
agencies RusRating (Russia), KzRating (Kazakhstan) and AmRating
(Armenia) were created by Richard Hainsworth and have been brought
together in the Global Rating Group. In the near future the group plans
to add national rating agencies in Azerbaijan (AzeriRating), Ukraine
(Ua-Rating) and other CIS regions.
The primary goal of the Global Rating Group is to establish a network
of national rating agencies across the CIS, promoting national brands
and strengthening the market position of each agency in its own country
and the international community.