We are presenting to your attention summary of the results of the Armenian banking sector for 9 months of 2022, prepared and published exclusively on Banks.am by a specialized consulting company RUMELS Management Solutions.

Ruben Melikyan, the founder of the company, has more than 22 years’ experience, as a successful c-level executive (CEO/CFO), with a successful track record leading diverse management teams in different areas, like audit, micro-finance, retail, FMCG and banking. Ruben Melikyan is an ACCA member; he graduated from Oxford University (EMBA) and recently received a Certificate on “Advanced Corporate Valuation” from NYU.

- The purpose of this study is to analyze the main financial indicators of the Armenian banking system during first three Quarters of 2022.

Net Profit

Total net profit of all Armenian banks for 9 months of 2022 is equal to 188 bln AMD (430 mln USD), which is by 121 bln AMD, or by 2.8 more than was recorded during 9 months of 2021.
The mentioned increase of the net profit is mainly due to a significant increase of the non-interest income (commissions, income from FX conversion, etc.).

The largest profit was recorded by Ardshinbank, which amounts to 41 bln AMD. The bank has also the largest market share on total assets, which is equal to 16.5%.

Total loan portfolio
 
- The total loan portfolio of the banking sector during 9 months of 2022 has slightly decreased by 0.2%.

- As of 30.09.2022, the total loan portfolio has amounted to 3.992 bln AMD and its share in total assets is 52%.

- The mentioned total loan portfolio includes retail and corporate loan portfolios.

- Market share of largest 5 banks (Ameriabank, Ardshinbank, ArmBusinessBank, ACBA Bank and AEB) by total loan portfolio, is 60.8%.

- Ameriabank has the largest market share - 17.7%.

Current accounts and deposits from customers

- During 9 months of 2022, the total balance of current accounts and deposits of retail and corporate clients of the banking sector has increased by 465 bln AMD or by 12%.

- As of 30.09.2022, the total balance of current accounts and deposits of retail and corporate clients has amounted to 4.339 bln AMD and its share in total liabilities is 67%.

Bonds

- During 9 months of 2022, the total balance of bonds issued by Armenian banks has decreased by 80.5 bln AMD, or 18%.

- One of the possible reasons, might be the changed mandatory reservation normative for the bank, stipulated by the CBA (previous normative encouraged the banks to start issuing bonds).

- 12 out of 17 banks issued bonds.

Total equity

- During 9 months of 2022, the total equity of the Armenian banking sector has increased by 278 bln AMD, or 30% and amounts to 1.205 bln AMD. This significant increase is mainly explained by the increase of retained earnings and increase of the share capital of Armbusinessbank by 128 bln AMD.  The bank’s shareholding has also changed and there are currently two shareholders: MFM Global Invest AG and “Home for youth” Refinancing Credit Organisation Closed JSC with 75% and 25% of shareholding respectively.

- The major component of total equity of Armenian banking sector is Share Capital (including -share premium), with the share of 58% and is amounting to 699 bln AMD as of 30.09.2022.

- Share capital (including share premium) of banking system has increased by 136 bln AMD.

- Second largest component - Retained Earnings (including general reserve) with the share of 42% and is amounting to 505 bln AMD as of 30.09.2022.

- During 9 months of 2022, retained earnings (including general reserve) of the Armenian banking sector have increased by 168 bln AMD, or by 50.1%

- Seven banks declared dividends during 9 months of 2022, amounting to 15.5 bln AMD (Inecobank-6 bln AMD, ACBA Bank-3.3 bln AMD, AraratBank-3 bln AMD, AEB-1.15 bln AMD, Ardshinbank-1.11 bln AMD, Converse Bank-0.51 bln AMD and Unibank 0.46 bln AMD).

- Revaluation reserves have decreased by 26 bln AMD and amounted to 0.7 bln AMD.

Full version of the analysis of the Armenian banking sector results for 9 months of 2022 is available on this link.

Full version of the analysis of the Armenian banking sector results for 1HY-2022 is available on this link.

Full version of the analysis of the Armenian banking sector results for 1Q-2022 is available on this link.