Armenia’s banking system has built up a solid resilience against potential economic shocks, with the countercyclical capital buffer increased to 1.75% and the number of compliance specialists in banks doubling over the past three years. This was announced by Martin Galstyan, Chairman of the Central Bank of Armenia, during his address at the International Banking Forum in Yerevan on November 7.
According to Galstyan, the resilience of Armenia’s financial system has notably strengthened in recent years.
"Our policy has focused on consolidating the positive outcomes of previous years and building reserves to counter potential future risks," Galstyan noted. He added that part of the banks’ profits was allocated to increase the countercyclical capital buffer, which was recently raised to 1.75%.
The head of the Central Bank highlighted the current growth in the loan portfolio, largely driven by high levels of lending to households and the construction sector. "The banking system has a high capital adequacy and liquidity, ensuring its resilience to potential shocks," he stated.
Speaking at the forum, Galstyan also underscored significant advancements in risk management and compliance. Over the past three years, the number of compliance personnel in banks has nearly doubled.
Special emphasis in his report was placed on environmental, social, and governance (ESG) areas. Galstyan shared that the Central Bank of Armenia plans to publish an updated strategy soon, where these aspects will play a central role.
Concluding his speech at the forum, Galstyan emphasized the importance of strengthening corporate governance standards within commercial banks, calling it one of the long-term assurances for the stability and competitiveness of Armenia's banking system.
