Armenia's banking sector strong enough to withstand stressful situations
26.05.2020,
15:21
Citing high capitalization and liquidity indicators, Seyran Sargsyan, Executive Director of the Union of Banks of Armenia, told a news conference on Tuesday that the country's banking sector (comprised of 17 commercial banks) is strong being able to withstand stressful situations.
YEREVAN, May 26. /ARKA/. Citing high capitalization and liquidity indicators, Seyran Sargsyan, Executive Director of the Union of Banks of Armenia, told a news conference on Tuesday that the country's banking sector (comprised of 17 commercial banks) is strong being able to withstand stressful situations.
He said the main capitalization indicator- the ratio of total capital to assets is 14.6% on average, while the standard requirement is 12%. He said also that the ratio of total capital to liabilities is 17.1%, which is also higher than the standard requirement.
He also noted that from the point of view of liquidity, an important indicator is the ratio of highly liquid assets to total assets, which in Armenia is, on average, 31.6%, while the standard requirement is only 15%.
"In fact, the liquidity of Armenian banks is twice as high as required by the approved standards," Sargsyan said.
At the same time, according to him, the ratio of highly liquid assets to demand liabilities is 166.2%.
He said all these figures indicate the banking system's sustainability and its ability to withstand stressful situations,
According to the Union of Banks of Armenia, Armenian banks' profit in the first quarter of 2020 increased by 7.2 billion drams from the same period in 2019 amounting to 23.3 billion drams. Their total capital in the first three months of this year increased by 2.1% to 862 billion drams. The sector's assets amounted to 5 trillion and 907 billion drams, up from 5 trillion and 805 billion drams at the end of 2019.
Their total liabilities amounted to 5 trillion and 45 billion drams, which is 85 billion drams or 1.7% more than at the end of 2019. And liabilities to customers during the reporting period decreased by 1.4% to 3 trillion and 427 billion drams. ($1 - 483.00 dram). -0-
He said the main capitalization indicator- the ratio of total capital to assets is 14.6% on average, while the standard requirement is 12%. He said also that the ratio of total capital to liabilities is 17.1%, which is also higher than the standard requirement.
He also noted that from the point of view of liquidity, an important indicator is the ratio of highly liquid assets to total assets, which in Armenia is, on average, 31.6%, while the standard requirement is only 15%.
"In fact, the liquidity of Armenian banks is twice as high as required by the approved standards," Sargsyan said.
At the same time, according to him, the ratio of highly liquid assets to demand liabilities is 166.2%.
He said all these figures indicate the banking system's sustainability and its ability to withstand stressful situations,
According to the Union of Banks of Armenia, Armenian banks' profit in the first quarter of 2020 increased by 7.2 billion drams from the same period in 2019 amounting to 23.3 billion drams. Their total capital in the first three months of this year increased by 2.1% to 862 billion drams. The sector's assets amounted to 5 trillion and 907 billion drams, up from 5 trillion and 805 billion drams at the end of 2019.
Their total liabilities amounted to 5 trillion and 45 billion drams, which is 85 billion drams or 1.7% more than at the end of 2019. And liabilities to customers during the reporting period decreased by 1.4% to 3 trillion and 427 billion drams. ($1 - 483.00 dram). -0-
