YEREVAN, FEBRUARY 17, ARMENPRESS. Today, the efficiency index of the banking system in Armenia is quite low, therefore the further development of banks will depend on the increase in efficiency. Banks with low performance will find it difficult to raise capital and face competition. Tigran Jrbashyan, development director of "Ameriabank" CJSC, mentioned this during a meeting with journalists, presenting the indicators of the banking system of Armenia during 2014. Presenting for the first time in a new format, the management of "Ameriabank" summarized the results recorded not only by their bank, but by the entire banking system during the last 3 years.
"In general, the system has developed extensively in the past 3 years. Active lending has been driven by declining yields, as evidenced by several key financial indicators. Here, the assets/GDP ratio was around 75.8 percent, and the deposits/GDP ratio was more than 37 percent. We are still behind many countries in this, although there is some growth. Our assets are less profitable than in other countries," Jrbashyan said, according to Armenpress.
The development director of "Ameriabank" said that the most important indicator for attracting capital, the return on capital, is also at a low level in Armenia. "If our neighboring countries are talking about two-digit numbers, in Armenia it is only 6.9 percent. In Armenia, the expenses of the banks "eat" most of the income, and the bigger the banks, the more the expenses decrease, which is natural, because in that case the expenses become more efficient," he emphasized.
Tigran Jrbashyan informed that the rate of development of the banking system in Armenia over the past 3 years has surpassed the rate of development of the gross domestic product (GDP), as a result of which the banks have achieved interesting indicators, in contrast to CIS and Eastern European countries. "When we look at the most important indicator that shows the role of the banking system in the economy (loans/GDP indicator), in 2012 Armenia was inferior to most countries, and as a result of 2014 we already have an indicator of 47.7 percent. For comparison, I should say that it is close to the index of Russia and ahead of the index of Georgia," he noted.
Jrbashyan said that unlike in Georgia, where two large banks occupy almost 80 percent of the banking market, in Armenia the first 5 banks together occupy only 46 percent of the system.
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