ASSETS OF ARMENIAN BANKING SYSTEM UP 22.2% OVER 9 MONTHS OF 2009

ArmInfo
2009-12-03 13:53:00

ArmInfo. Assets of the Armenian banking system were up 22.2% over
9 months of 2009 totaling 1.266 trillion drams ($3.3 billion) as of
Sept 30. Analysis and Ranking of Armenian Commercial Banks prepared
by Agency of Rating marketing Information (ArmInfo) says assets grew
10.6% for Q3 2009 and 31% per year.

Assets grew per year as lending grew 15.7%, funds on nostro-accounts
grew 92.8%, cash grew significantly and investments in government bonds
were up 7.6% per year. The growth of assets for Q3 was the result
of 10.1% growth of credit portfolio, 51.5% growth of investments in
government bonds, 5% growth of cash, despite 19.6% quarterly decline
of funds on nostro-accounts (exclusive of correspondent accounts
with Central Bank of Armenia). In the structure of assets, the share
of lending was 57% (versus 57.3% for Q2 and 59.2% for Q1 2009) and
the share of investments in government bonds was 6.4% (versus 5.3%
for Q2 and 5.6% for Q1 2009) and versus 64.6% and 7.8% growth for
9 months of 2008, respectively. ArmInfo experts explain the annual
decline of the share of investments in government bonds and lending
with the global crisis that made Armenian banks sell trade portfolios
of government bonds, funds on nostro- accounts and cash to maintain
lending focusing on economy sector and cutting retail lending. Top
three leaders by assets as of Sept 30 2009 were ACBA-Credit Agricole
Bank, HSBC Bank Armenia and Ardshininvestbank.

Their share in total assets was almost 33%.

Real lending as of Sept 30 2009 totaled 722.4 billion drams ($1.9
billion) or 57% of assets. The share of loans to economy sector was 64%
of total lending or 461.8 billion drams ($1.2 billion). This indicator
grew 43.7% per year and 23.4% for Q3, whereas comparing to 9 months
of 2005 it grew almost four times. Total personal loans fell 20.8%
per year, 11.1% for Q3 and grew almost thrice versus the same period
of 2005 totaling 231.6 billion drams or $0.6 billion on Sept 30 (32%
of total lending). Unlike previous years, in 2008-2009 growth rates
of lending to individuals yielded to growth rates of lending to the
economy sector affected by the global financial crisis that made
banks restrict consumer, mortgage and auto loans. Instead, banks have
started actively lending to SME, trade and agricultural sectors. It is
noteworthy that starting from Q1 2009 only few banks has been providing
retail lending and only subject to refinancing (loans are provided
only to bonafide clients). Lending to the transport and communication
sectors grew 36.6% for 9 months of 2009. Lending to construction sector
grew 18.8%, to industrial sector – 17.2%, services sector – 17.2%,
and trade sector – 15.4%. Portfolio of retail loans of commercial banks
suffered 1,4% decline for 9 months of 2009 as auto loans fell 31.1%.

Top three of leaders by lending to economy sector were ACBA-Credit
Agricole Bank – 63.1 billion drams or $164.3 million (73.3% of total),
Armbusinessbank – 47.3 billion or $123 million (83.35 of total) and
VTB Bank (Armenia) – 43.6 billion drams or $113.4 million (62.7% of
total). ACBA-Credit Agricole Bank provides agricultural loans as part
of lending to economy sector. ProCredit Bank that entered the market
in early February 2008 has already ensured the largest share in total
lending to economy sector by late Sept 2009 – 91.1% or 9.4 billion
drams (up from 14th to 13th position for Q3). The share of Mellat Bank
in total lending to economy sector was the smallest – 28.7% or 1.3
billion drams. HSBC Bank Armenia was the leader by personal loans –
29.4 billion drams or $76.6 million (34.2% of total lending). Unibank
was ranked the second by 26.5 billion drams or $69.1 million (46.7%).

VTB Bank (Armenia) was ranked the third by 23.8 billion drams or
$61.8 million (34.2%).

Mellat Bank was leader by the share of personal loans in total – 71.3%
or 3.3 billion drams (18th position in banking system). Areximbank -GPB
Group was in the third position by the share of personal loans in total
lending – 52% or 9.7 billion drams, due to its leading positions in the
market of auto loans (third position for 9 months of 2009 despite the
32% decline). The share of auto loans in the bank’s credit portfolio
is 22% or 4.1 billion drams, which is almost 12% of total portfolio
of auto loans in the banking system of Armenia. Alongside with this,
the bank increased mortgage lending for 9 months of 2009 24%. The
highest growth was recorded in the Q2. Mortgage lending by Areximbank
– GPB Group suffered 4.8% decline for Q3. ProCredit Bank ensured the
lowest share of personal loans in total lending (8.9% or 0.9 billion
drams). This bank has been traditionally avoiding consumer lending.