IN 2009 THE ASSETS OF ARMENIAN BANKING SYSTEM GREW BY 29,9% TO $3.6 BLN

ArmInfo
03.03.2010

ArmInfo. In 2009 the assets of the Armenian banking system grew by
29,9%, and in the second half year – by 17,6%, over IV quarter – by
6,3%, having totaled 1.346 trln AMD ($3.6 bln) by 31 December 2009. By
the amount of assets, as of 31 December 2009, the top five includes
ACBA-Credit Agricole Bank, HSBC Bank Armenia, VTB Bank (Armenia) and
Ardshininvestbank whose share makes up 40% of the summary assets of
the banking system.

According to the Analysis and Ranking of the Armenian banking
system by the Agency of Rating Marketing Information (ArmInfo), the
annual growth in assets was conditioned by the growth in provision
of crediting by 20,4%, investments in government bonds by 17,6%,
funds on nostro-accounts by 16%, cash funds by 55,8%. The quarterly
growth (in IV quarter 2009) in assets of the banking system is
conditioned by the growth in credit portfolio by 7,7%, investments
in government fonds by 10,7%, cash funds by 4,2% (5% growth in
III quarter, 3,5% growth in II quarter, 34% growth in I quarter),
funds on nostro-accounts (corresponding accounts in the Central Bank
of Armenia (CBA) exclusive) by 0,5%. In the structure of assets,
the share of provision of crediting made up 57,8% (as against 57%
in III quarter, 57,3% in II quarter and 59,2% in I quarter 2009),
and the share of investments in government bonds – 6,7% (as against
6,4% in III quarter, 5,3% in II quarter and 5,6% in I quarter 2009)
as against 62,4% and 7,4% respectively in 2008.

Experts think that the annual reduction in the share of investments
in government bonds and provision of crediting in assets proves
that against the background of the crisis, Armenian banks continue
maintaining the crediting rates with more focus on fields of economy
and less focus on retail crediting at the expense of trade portfolios
of government bonds, funds on nostro-accounts and cash funds.

By 31 Dec 2009, the volume of real provision of crediting amounted to
778.2 bln AMD ($2.1 bln), having made up 57,8% of assets. The share of
economy crediting made up 60,2% of the total provision of crediting or
468.3 bln AMD ($1.2 bln), and this index annually grew by 37,2%, and
only over IV quarter – by 1,4%. At the same time, the summary volume
of crediting of individuals by commercial banks annually declined by
10,6%, growth in IV quarter being 14,1%, having totaled 264.2 bln AMD
or $0.7 bln (34% of the total provision of crediting) by 31 Dec 2009.

Unlike the previous years, in 2008-2009 the growth rates of crediting
of individuals yielded to the growth rates of economy crediting, which
was conditioned by the global financial crisis when the banks started
carrying out consumer crediting, mortgage crediting and auto- crediting
more carefully. Instead, crediting of small and medium business,
industrial sector and even agriculture was activated. It should be
noted that since the first quarter of 2009, only few banks have been
carrying out retail crediting (consumer credits, mortgage crediting
and auto-crediting) on refinancing terms (the loans were provided to
their seasoned clients). By the economy crediting by commercial banks,
the biggest growth in 2009 was fixed in the industrial sector – by
67,7%, in construction sector – by 40,7%, in the sphere of transport
and communication – by 34,7%, in the sphere of servicing – by 22,8%,
in agriculture – by 20,1% and trade – by 4,6%. In retail crediting
the mortgage portfolio of the banks grew by 0,3% in 2009, while
auto-crediting declined by 31,1%.

By the economy crediting, the top three includes ArmBusinessBank –
48.9 bln AMD (80,9% of total provision of crediting of the bank),
Ameriabank – 46.4 bln AMD (68,4%) and VTB Bank (Armenia) – 46.3 bln AMD
(63,6%). ProCredit Bank, which entered the banking market in Feb 2008,
managed to secure the biggest share of economy crediting in the credit
portfolio – 90,3% or 11.4 bln AMD (14th position). The lowest share
of economy crediting in the total provision of crediting is fixed by
BTA Bank – 32% or 1.3 bln AMD.

By crediting of individuals, the leading position is held by
ACBA-Credit Agricole Bank – 53.9 bln AMD (57,3% of total provision of
crediting, including agricultural loans provided to farmers), Unibank
ranks next – 27.9 bln AMD (42%) and the third position is held by HSBC
Bank Armenia – 26.1 bln AMD (32,7% of total provision of crediting).

By the share of crediting of individuals in the total provision
of crediting, BTA Bank is in the lead – 68,1% or 2.8 bln AMD (19th
position in the banking system). Areximbank holds the fourth place
44% or 9.5 bln AMD, which is mostly conditioned by one of the leading
positions of the bank in the market of auto-credits (IV position in
2009 despite 44% decline), in which it invested 16% of the credit
portfolio or 3.4 bln AMD, this index being almost 10% of the summary
portfolio of auto-credits of the commercial banks. Along with it,
Areximbank considerably activated in the mortgage market, having
increased these volume of credits by 79,4% in 2009, growth in IV
quarter made up 46% and no less considerable growth was fixed in II
quarter as well. The lowest share of crediting of individuals in the
total provision of crediting was fixed by ProCredit Bank – 9,7% or
1.2 bln AMD, which was conditioned by the bank’s key specialization
in the small and medium business crediting.