ADEQUACY OF ARMENIAN BANKING SERVICE AT HIGH LEVEL, PREMIER SAYS

ARKA
Oct 20, 2008

YEREVAN, October 20. /ARKA/. Adequacy of Armenia’s banking system
is at a high level, RA Prime Minister Tigran Sargsyan said lat week,
summing up Armeian delegation’s October 9-15 visit to Washington.

"The proof is the ratio between the banks’ total capital worth 218bln
drams and assets amounting to 985bln drams," the premier added.

Sargsyan believes financial property owners can withstand any financial
risks with the help of their own capital and if something goes wrong
in the sector, they are the first to run risks.

"We do not have to worry about local financial system thanks to
high-level capitalization of Armenia’s banking system," the premier
said.

Touching upon deposits, loan investments and shares, Sargsyan
underlined this year’s sustainable financial growth.

"Both the loan investments and resource base are showing a tendency
of growth," he added.

Armenia’s Government made a decision on September 19 to increase this
year’s budget expenditures and receipts by 13.3bln drams (around
$44mln) with the help of tax proceeds. Cutting the budget deficit,
the country will be able to guarantee macroeconomic stability and we
do not have to worry about that," the prime minister said.

Twenty-two commercial banks are currently operating in Armenia. The
country’s bank assets ro se 23.53% to 966.7bln drams between Q1
and Q3. Liabilities of local commercial banks increased by 23.01%
to 749.4bln drams. The banks’ capital totaled 217.3bln drams (25.39%
growth) and the authorized capital stock amounted to 134.5bln drams
as of September 30.

Loan investments rose 45.53% to 608.3bln drams between January and
September. Liabilities to customers increased by 20.13% to 525.8bln
drams.

Net profit of local banks reached 19.9bln drams in September, showing
a 15.81% year-on-year growth.