After the expansion of banks in Armenia, there will be no problem of monopolization, because the system is competitive and diversified. The largest 5 banks together capture only 46 percent of the system, and the rest of the banks operate mainly in specialized sectors. Tigran Jrbashyan, Development Director of "Ameriabank" CJSC, stated this at a meeting with journalists, talking about the Central Bank's decision that the capital of banks will increase from 2017, and it will be set at 30 billion drams.
"The banking system of Armenia has no problem of monopolization, and mergers will definitely take place. Even if it weren't for the Central Bank's decision to revise the capital requirements, the merger would have gone on its own, there just wasn't the motivation. And now the owners are going to decide which is better: to merge and go through some processes or to wait until the bank suffers losses. The CB decision only accelerated that process," he said, according to "Armenpress".
According to Jrbashyan, in the next two years there will be mergers and acquisitions, new players, banks with new status and opportunities will emerge, and this will lead to increased stability and efficiency. "This process will be quite healthy and, I think, in 2017 we will have a banking system with other opportunities and other profitability indicators, which is ready to attract new capital and carry out financing," he said.
"Ameriabank" CJSC director, general director Artak Hanesyan also mentioned that the capital indicates the stability of banks in difficult times. "Increasing capital will, first of all, lead to increased stabilization, secondly, capital is the tool that gives skill to the further growth of the system. Currently, the capital adequacy ratio of banks is approaching the limit, which implies that we cannot develop further and lend to the economy without attracting additional capital," he emphasized. According to Hanesyan, many banks are now open and ready to merge, which will ultimately lead to an increase in efficiency. "I think the optimal number of banks in Armenia is 10-12," he said.
The Central Bank of RA in 2014 adopted a decision on December 30, according to which, in 2017 from January 1, the minimum amount of the total capital of banks will be 30 billion drams, instead of the currently required 5 billion drams. The Central Bank conditioned its decision on the necessity of promotion and enlargement of bank mergers.