YEREVAN, August 24. /ARKA/. The banking sector of Armenia remains well-capitalized and highly profitable, supported by high net interest income and stable economic growth. This is stated in the report by the international rating agency S&P Global Ratings.
“The growth of lending remains high, mainly supported by consumer and mortgage lending, although the tightening of macroprudential measures and the gradual phasing out of tax benefits for mortgages have begun to cool demand for housing, especially in Yerevan,” the review says.
Despite the rapid growth of lending leading to an increase in private sector debt, the agency's analysts consider the associated risks at this stage to be manageable, given the significant capital buffers of banks, stable asset quality, and expectations that profitability will remain high despite the gradual normalization of indicators after recent peaks.
The agency notes that as a preventive measure, the central bank raised the countercyclical buffer by 0.25 percentage points in July; thus, the new rate of 2.0% will come into effect in February 2027.
“The gradual dedollarization of banks' balance sheets has further reduced currency risks, and the increasing attraction of funding from non-residents and international financial organizations is unlikely to lead to a significant deterioration in financing conditions. The main risk for the banking sector remains high geopolitical uncertainty,” the report emphasizes.
According to the agency's bulletin “Performance Indicators of Armenian Banks. Operational Data for Q2 2026,” compiled based on reports of Armenian banks according to international standards (IFRS), the total net profit of Armenian banks for the first half of 2026 amounted to 219.72 billion drams, an increase of 9.48%. The total assets of Armenian banks as of June 30, 2026, amounted to 13.84 trillion drams (annual growth of 19.15%); the volume of bank lending reached 8.56 trillion drams (growth of 23.56%); total liabilities amounted to 11.61 trillion drams (growth of 20.27%); the total capital volume was 2.23 trillion drams (growth of 13.63%).
