Banks in Armenia are actively collaborating with European financial institutions; however, full integration into the international banking system requires the adoption of modern tools. This was highlighted by Daniel Azatyan, Chairman of the Union of Banks of Armenia, speaking at the International Banking Forum in Yerevan on November 7.
“The current challenge is to implement environmental, social, and corporate governance (ESG) standards to ensure the legality, transparency, and security of transactions,” noted Azatyan.
According to him, over the past two years, Armenia’s banking system has achieved profitability levels comparable to those of European and global banks. Azatyan explained that this profitability is measured by the return on equity (ROE) indicator. Previously, this figure was below 10% in Armenia; however, in recent years, it has reached 20%, aligning with standards seen in Europe, the United States, and Georgia.
Azatyan also pointed out that Armenian banks are now only 1-2% behind the profitability rates of banks in neighboring countries.
In response to a question from journalists regarding expert proposals to increase taxes on banks due to their high profitability, Azatyan clarified: “There is no such practice globally, and where it does exist, it is implemented with entirely different goals. If the government considers the banking sector’s profits high, it’s essential to understand the basis of this comparison. Yes, profits are higher compared to previous years, and that’s a positive development, as we are only now reaching international standards. High banking profits translate into substantial income taxes. Banks are likely the only sector where the majority of taxes are ‘quality taxes,’ primarily income tax.”
Earlier, BMG reported that Armenian commercial banks earned $691 million in net profits in the first nine months of 2024, representing a 25% increase over the same period last year.
