The prestigious American rating agency S&P Global Ratings awarded Ameriabank a long-term and short-term rating of B+/B with a "stable" outlook. Ameriabank is the first Armenian company to receive an S&P rating. So far, S&P Global Ratings has not awarded a sovereign rating to the Republic of Armenia.
According to S&P Global Ratings, Armenia's sovereign creditworthiness reflects the limitations of the bank's rating, that is, the bb- rating of Ameriabank's own creditworthiness (stand-alone credit profile (SACP)) is one step higher than the long-term B+ rating.
Ameriabank's credit rating reflects Ameriabank's position as Armenia's largest bank and S&P Global Ratings' expectations that the bank will maintain its leading position and capitalization level will increase over the next 24 months due to stable income.
The rating's stable outlook for the next 12 months reflects S&P Global Ratings' forecasts that the bank's operations and financial indicators will be stable during the specified period due to its strong market position and the improvement of Armenia's macroeconomic environment.
According to S&P Global Ratings, Armenia's banking sector will be stable, without noticeable market distortions. The sector risk trend is also assessed as stable.
S&P Global Ratings considers credit risk a factor negatively affecting Armenia's banking sector, given the higher weight of foreign currency loans, especially unhedged loans to individuals and legal entities, than in comparable countries, and the fact that Armenia's judicial system is not yet fully established. S&P Global Ratings assesses the economic risk trend of Armenia's banking sector as stable.
The agency also notes that during the previous 6 years, Ameriabank had good profitability indicators, in particular, the average return on assets was 1.4%, and the ratio of costs to income in 2017 was as of the end it was 40%, which is quite a good indicator compared to local and foreign banks.
According to S&P Global Ratings, Ameriabank has a good chance of maintaining its leading position in Armenia, given the favorable macroeconomic environment and its improvement, as well as a professional management team and a highly capable controlling shareholder with extensive experience in banking and finance.