Assessment of the Profitability Indicators of Armenian Commercial Banks and the Forecast of Possible Scenarios to Increase Profitability
DOI:
https://doi.org/10.55908/sdgs.v11i10.1761Keywords:
analysis, banking system, challenges, issues, profitability indicatorsAbstract
Purpose: The main purpose of the study is the comparative analysis of total capital, total assets, net profit, return on assets (ROA), return on equity (ROE) and net interest margin (NIM) of 17 commercial banks operating in Armenia for several years are presented, the advantages and disadvantages of the banks with high and low results in the above-noted indicators have been briefly commented on.
Theoretical framework: Currently, the banking system of Armenia is the most developed one in comparison with other sectors of the economy, as the processes of attracting deposits, providing loans and fulfilling the standards set for commercial banks are regulated in line with the world experience. The object of study is operational environment of the banks.
Design/methodology/approach: The profitability indicators are considered to be the most basic tool for assessing the efficiency of operations carried out by commercial banks. Methodological tools of the study methods were interest income, interest expense and average annual return on profitable assets, which were analyzed separately.
Findings: The relevance of this scientific problem decision is that the negative consequences the COVID-19 pandemic within the business environment of the Armenian banking system have been studied.
Research, Practical & Social implications: In the context of new economic relations, the banking system holds an important part in ensuring the economic growth and economic development of any country, including the Republic of Armenia. Possible ways to increase the profitability of the Armenian banking system were suggested in this study, the existing challenges of the banking system were identified.
Originality/value: Based on the results of the research of the profitability indicators of the RA banking system and the conclusions drawn, several ways of increasing the profitability of banks were proposed.
References
Alharthi, M. (2016). Determinants of profitability in banking: an international comparative study of islamic, conventional and socially responsible banks. Corporate Ownership & Control. Volume 13. Issue 4. Continued-4, 633-634. https://doi.org/10.22495/cocv13i4c4p12
Annual financial statements published by Armenian banks, 2018-2021.
Armeconombank, (2021). Ratings and awards.
Banerjee, R., Majumdar, S., Albastaki, M. (2022). Ideal self-congruence: Neobanking by traditional banks and the impact on market share -A case of UAE banks. International Journal of Professional Business Review. Vol. 7, no. 4. https://doi.org/10.26668/businessreview/2022.v7i4.e779
Bayadyan, A.A. (2008). The system of profitability indicators of commercial banks and factor analysis. Educational-methodical instruction. Yerevan, 56-57.
Black Sea Trade & Development Bank. (2020). Annual report, 16.
Byblos Bank Armenia CJSC (2020). Statement of Financial Position.
Central Bank of the Republic of Armenia. (2020). Annual report.
Central Bank of the Republic of Armenia. (2021). Annual report.
Hallunovi, A., (2017). Determinants of profitability according to groups of banks in Albania. ILIRIA International Review, 7 (1), 36-45. https://doi.org/10.21113/iir.v7i1.280
Handito, P.D., Wiwiek, M.D., (2019). Earning per share (EPS), price book value (PBV), return on asset (ROA), return on equity (ROE), and index Harga Saham Gaburgan (IHSG) effect on stock return. South East Asia Journal of Contemporary Business, Economics and Law, Vol. 20, Issue 1 (DEC) ISSN 2289-1560, 20.
Karapetyan, N. (2017) Profitability and vulnerability of Armenian banks. ASUE ‘’Amberd” Research Center.
Knyazeva, E.G., Bakunova, T.V. (2019). Economic analysis organization’s activity in the bank’s credit risk management system. Teaching aid. Yekaterinburg, Ural University, 41, 45.
Medcraft, Greg. (2021). The COVID-19 crisis and banking system resilience Simulation of losses on non-performing loans and policy implications. Director, OECD Directorate for Financial and Enterprise Affairs., OECD, 18.
Mellat Bank (2020). Annual Audit Report, 8-9.
Rumels Management Solution (2019/2020). Profitability analysis of Armenian banking sector.
Shanmugam, R.M., and Chandran, M. (2022). A relationship between service quality and customer satisfaction in e-banking services- a study with reference to commercial banks in Chennai City. International Journal of Professional Business Review. Vol. 7, no. 3.https://doi.org/10.26668/businessreview/2022.v7i3.0490
Sylwester, K. (2021). The Impact of COVID-19 on Bank Equity and Performance: The Case of Central Eastern South European Countries. Sustainability. 13(19). https://doi.org/10.3390/su131911036
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors who publish with this journal agree to the following terms:
1. Authors who publish in this journal agree to the following terms: the author(s) authorize(s) the publication of the text in the journal;
2. The author(s) ensure(s) that the contribution is original and unpublished and that it is not in the process of evaluation by another journal;
3. The journal is not responsible for the views, ideas and concepts presented in articles, and these are the sole responsibility of the author(s);
4. The publishers reserve the right to make textual adjustments and adapt texts to meet with publication standards.
5. Authors retain copyright and grant the journal the right to first publication, with the work simultaneously licensed under the Creative Commons Atribuição NãoComercial 4.0 internacional, which allows the work to be shared with recognized authorship and initial publication in this journal.
6. Authors are allowed to assume additional contracts separately, for non-exclusive distribution of the version of the work published in this journal (e.g. publish in institutional repository or as a book chapter), with recognition of authorship and initial publication in this journal.
7. Authors are allowed and are encouraged to publish and distribute their work online (e.g. in institutional repositories or on a personal web page) at any point before or during the editorial process, as this can generate positive effects, as well as increase the impact and citations of the published work (see the effect of Free Access) at http://opcit.eprints.org/oacitation-biblio.html
• 8. Authors are able to use ORCID is a system of identification for authors. An ORCID identifier is unique to an individual and acts as a persistent digital identifier to ensure that authors (particularly those with relatively common names) can be distinguished and their work properly attributed.