Armenian News... A Topalian...Armenian Soldier Dies
Bloomberg
Dec 12 2015
Armenian Soldier Dies as Clashes Escalate Along Azeri Border
Sara Khojoyan
An Armenian soldier was killed in an overnight clash with Azeri
forces, the Defense Army of the disputed Nagorno-Karabakh region said
Saturday on its website, as tensions escalate in the energy-rich
region of the South Caucasus.
At least four Armenian troops and three Azeri soldiers have now died
and several more have been wounded since Dec. 1 in confrontations that
included mortar and artillery fire. The two sides accuse each other of
hundreds of cease-fire violations. Nagorno-Karabakh reported Azeris
broke the truce 120 times, and Azerbaijan said Armenia violated the
cease-fire 84 times in the past 24 hours.
Resumption of large-scale hostilities would threaten energy
infrastructure in Azerbaijan, the former Soviet Union's third-biggest
oil producer. Since 1994, it has attracted more than $50 billion in
investment from London-based BP Plc and its partners.
The confrontation had it beginnings in the dying days of the Soviet
Union two decades ago when a dispute between Armenia and Azerbaijan
flared into a war that killed 30,000 and turned 1 million residents
into refugees.
Mediators led by the U.S., France and Russia have failed to bring
peace since the truce. Armenia says the enclave's Christian Armenians,
who declared independence from largely Muslim Azerbaijan in 1991, have
the right to self-determination. Azerbaijan demands respect for its
territorial integrity.
The mountainous territory along Russia's southern border stretches
north from Nagorno-Karabakh through Georgia, Ukraine and Moldova.
armradio.am
THREE ARMENIAN CHURCHES IN SYRIA DESTROYED BY ISIS
14 Dec 2015
Siranush Ghazanchyan
The Assyrian International News Agency (AINA) has released the list of
Christian churches and monasteries in Syria that have been destroyed
by ISIS and other Muslim groups.
Attacks on Christians in Syria began almost immediately after the
Syrian civil war began. The attacks have targeted villages, churches
monasteries and the clergy, and have been perpetrated by Al-Qaeda,
the Al-Nusra Front, ISIS and other Muslim groups.
On February 23 ISIS attacked the 35 Assyrian villages on the Khabur
river in Hasaka, Syria, capturing 253 Assyrians. In the subsequent
months it destroyed 11 churches and villages, rendering some villages
uninhabitable.
According to the agency, three Armenian Curches have also been
destroyed by terrorists. The St. Rita Tilel Armenian Church in Aleppo
was bombed by ISIS on April 28. The Armenian Genocide Memorial Church
in Der Zor was destroyed by ISIS in September, 2014. The Armenian
Catholic Church of the Martyrs was torched by ISIS and its cross atop
its clock tower removed.
ecolur.org
87.7% OF ARMENIAN POPULATION LIVING IN 18.7% AREA OF
ARMENIA
December 10, 2015
87.7% of the Armenian population is concentrated on 18.2% of the
area in Armenia. The population density here exceed the environmental
threshold of density by 2 times and over - 480-558 people live in 1 km2
of area instead of 200, as the National Action Plan on Conservation,
Protection, Recovery and Use of Biodiversity in Armenia for 2016-2020
says. Scarcely populated zones make up 38.0% of the Armenian area,
where only 12.3% of the population lives and the population density
is very low - 11-20 people/km2.
December 10, 2015
87.7% of the Armenian population is concentrated on 18.2% of the
area in Armenia. The population density here exceed the environmental
threshold of density by 2 times and over - 480-558 people live in 1 km2
of area instead of 200, as the National Action Plan on Conservation,
Protection, Recovery and Use of Biodiversity in Armenia for 2016-2020
says. Scarcely populated zones make up 38.0% of the Armenian area,
where only 12.3% of the population lives and the population density
is very low - 11-20 people/km2.
CBC Canada
Dec 12 2015
Syrian refugees get warm welcome at Armenian community centre
Many newcomers expected to stay in the Greater Toronto Area
By John Rieti, CBC News
Hugging her father tightly, Cerli Katchadorian said the best thing
about Canada is the playground.
Soon, the seven-year-old will get to play there every day when she
goes to the school attached to the Armenian Cultural Centre in north
Toronto. But today, she is one of the 92 Syrian refugees who came to
the centre for a joyous welcome on their first day in this country.
Syrian refugees now in Toronto look forward to 'beautiful future'
Mother, daughter to host 43 Syrian refugee family members
Cerli's family were among the 163 aboard a Canadian government jet
that touched down at Toronto's Pearson International Airport late
Thursday. Eventually, Canada will welcome 25,000 Syrian refugees,
thousands of whom are expected to settle in the Greater Toronto Area.
Like many in attendance, Cerli's life has been touched by tragedy.
Hovic Katchadorian, her father, says his wife was killed during a
rocket attack near a church in Aleppo. When Cerli asks about her,
Hovic said, he tries to distract her with games.
After the attack, Katchadorian fled with his daughter and his mother
to Lebanon. Two weeks ago he received the news that he would be coming
to Canada and was "very, very happy," he said through an interpreter.
Happiness everywhere
That happiness was everywhere at Friday's event where newcomers ' most
of whom are Armenian-Syrian ' were matched up with their private
sponsors, who for some were family members while for others complete
strangers.
Mareina Gebeil, smiling as her daughter held a stuffed bear holding a
Canadian flag and her son played in a donated Toronto Maple Leafs
jacket, said she considered her sponsors "just like angels."
After recounting her joy of finding out she was coming to Canada
through a translator, Gebeil tried out a thank you message in English:
"God bless Canada and the people."
All of the children received a special treat on Friday, a chocolate
Santa for the holidays. (John Rieti/CBC)
She said coming here after fleeing from Damascus means a "new life."
That new life begins after today's event, when many of the newcomers,
who are now permanent residents of Canada, are taken to their new
homes and begin tasks ranging from learning English to searching for
new work.
"Today was a big day," said organizer Lorig Garboushian-Katerjian, who
herself left Syria for Dubai about 20 years ago before coming to
Canada in 2010.
Over the last four or five years nobody knew when Syrian refugees
arrived in Toronto, Garboushian-Katerjian said, and she would go and
pick them up from the airport herself.
That's completely changed now.
Centre of the country's attention
At the community centre, she managed a team of volunteers looking for
apartments for hundreds of new arrivals (a few families were still
looking for places to stay on Friday afternoon) and filling out
registration sheets that may eventually help families find work or
make other key connections.
There were plenty of smiles amid prayers and applause as church
leaders heaped praise on those who had organized the event.
Before that, a priest handed out chocolate Santas to the delight of
the children attending a special sermon. Among them was Madeleine
Jamkossian, a 16-month-old baby who was one of the first people
greeted by Prime Minister Justin Trudeau, Ontario Premier Kathleen
Wynne and Toronto Mayor John Tory ' not that she'll likely remember
it.
Kevork Jamkossian, her beaming father who was covered in melted
chocolate from Madeleine's partially eaten Santa, said he was so
excited last night that he couldn't sleep when the familyarrived at an
airport hotel. How will he ever explain these amazing days to his
daughter? "I don't know," he said.
Even if he can't explain it, Kevork said he's looking forward to
trying. Earlier, as he spoke with Trudeau through an interpreter, he
and his wife told the prime minister they felt like they had lived
through hell and arrived in paradise, and that their daughter's future
was the reason they made the trip.
With files from Makda Ghebreslassie and Ghalia Bdiwe
LAWYER SOFUOGLU: 'THIS IS A LAWSUIT FOR FREEDOM OF
WORSHIP'
Today's Zaman, Turkey
Dec 11 2015
Cem Sofuoglu, a lawyer representing the Armenian Catholicosate of the
Great House of Cilicia, has said that a case filed against the Turkish
state with Turkey's Constitutional Court by the Armenian religious
institution, which seeks to reclaim a piece of land within Turkey,
is not just a lawsuit for return of ownership but also for freedom
of worship.
As Armenians have stepped up efforts toward global recognition of the
mass killings and forced relocations of Armenians in the Ottoman Empire
as "genocide" on the centenary of the events, Sofuoglu submitted a
brief to the Constitutional Court on April 27, requesting the return
of land where the monastery of St. Sophia was located in the town of
Kozan, Adana.
Aram Keshishian, the head of the Lebanon-based Catholicosate of the
Great House of Cilicia, one of the two largest Armenian religious
institutions in the world, has personally applied to the Constitutional
Court for the return of the land on which the historic headquarters of
the Catholicosate of Cilicia once stood. The monastery was reportedly
seized by Ottoman authorities in 1921.
Reverend Housig Mardirossian, a representative of the Catholicosate
of Cilicia, and Sofuoglu spoke to the Cumhuriyet daily on Friday.
Elaborating on the current situation of the land, Sofuoglu said:
"It's now a protected area. Construction is forbidden there, so it has
been turned [by the municipality] into a children's playground. The
walls of the monastery have tumbled down."
Reverend Mardirossian spoke of photos from 100-120 years ago which
show that there was an immense monastery built upon the land. "All
that remains of the monastery are two towers," he says.
When asked whether the TL 100 million that is requested as compensation
will be used to rebuild the monastery, Sofuglu stated that it was a
legal obligation. "It's a part of the Constitutional Court's lawsuit
format. I was hesitant [to claim compensation] because the reverend
is sensitive about money issues. But I had to do my duty, and so
I put forward an arbitrary amount, although I wasn't ordered to do
that. 'We only want our monastery back' he told me," Sofuglu added.
After so many years spent seeking international acknowledgment of
the events of 1915 as genocide, attempting to recover land is a new
step for Armenia, which is expected to begin a new global campaign
focused on finding support for reparative action.
100 years after the alleged genocide of 1915, the European Parliament
(EP) passed a resolution calling on all EU members to recognize the
Armenian genocide, following Pope Francis' description of the events
as "the first genocide of 20th century," during a Sunday Mass in the
beginning of April. The same month witnessed a number of states, such
as Germany, Austria, Russia and Bulgaria, recognizing the events as
genocide. As of 2015, the governments of 29 countries have recognized
the events as genocide.
Turkish officials have always denied the use of the term genocide to
describe the events and have responded to other nations embracing the
term by summoning the ambassadors of the countries that have used it
for an explanation.
Turkey's official standpoint on the events of 1915 is that both
Turks and Armenians died during civil strife that resulted in the
forced deportation of Armenians. Turkish officials also maintain
that the number of Armenians said to have died before and during the
deportations is inflated.
If Turkey were to accept the claims of genocide, it would be expected
to pay reparations worth tens of billions of dollars to the families
who lost their loved ones as well as their properties in Turkey during
the events.
Today's Zaman, Turkey
Dec 11 2015
Cem Sofuoglu, a lawyer representing the Armenian Catholicosate of the
Great House of Cilicia, has said that a case filed against the Turkish
state with Turkey's Constitutional Court by the Armenian religious
institution, which seeks to reclaim a piece of land within Turkey,
is not just a lawsuit for return of ownership but also for freedom
of worship.
As Armenians have stepped up efforts toward global recognition of the
mass killings and forced relocations of Armenians in the Ottoman Empire
as "genocide" on the centenary of the events, Sofuoglu submitted a
brief to the Constitutional Court on April 27, requesting the return
of land where the monastery of St. Sophia was located in the town of
Kozan, Adana.
Aram Keshishian, the head of the Lebanon-based Catholicosate of the
Great House of Cilicia, one of the two largest Armenian religious
institutions in the world, has personally applied to the Constitutional
Court for the return of the land on which the historic headquarters of
the Catholicosate of Cilicia once stood. The monastery was reportedly
seized by Ottoman authorities in 1921.
Reverend Housig Mardirossian, a representative of the Catholicosate
of Cilicia, and Sofuoglu spoke to the Cumhuriyet daily on Friday.
Elaborating on the current situation of the land, Sofuoglu said:
"It's now a protected area. Construction is forbidden there, so it has
been turned [by the municipality] into a children's playground. The
walls of the monastery have tumbled down."
Reverend Mardirossian spoke of photos from 100-120 years ago which
show that there was an immense monastery built upon the land. "All
that remains of the monastery are two towers," he says.
When asked whether the TL 100 million that is requested as compensation
will be used to rebuild the monastery, Sofuglu stated that it was a
legal obligation. "It's a part of the Constitutional Court's lawsuit
format. I was hesitant [to claim compensation] because the reverend
is sensitive about money issues. But I had to do my duty, and so
I put forward an arbitrary amount, although I wasn't ordered to do
that. 'We only want our monastery back' he told me," Sofuglu added.
After so many years spent seeking international acknowledgment of
the events of 1915 as genocide, attempting to recover land is a new
step for Armenia, which is expected to begin a new global campaign
focused on finding support for reparative action.
100 years after the alleged genocide of 1915, the European Parliament
(EP) passed a resolution calling on all EU members to recognize the
Armenian genocide, following Pope Francis' description of the events
as "the first genocide of 20th century," during a Sunday Mass in the
beginning of April. The same month witnessed a number of states, such
as Germany, Austria, Russia and Bulgaria, recognizing the events as
genocide. As of 2015, the governments of 29 countries have recognized
the events as genocide.
Turkish officials have always denied the use of the term genocide to
describe the events and have responded to other nations embracing the
term by summoning the ambassadors of the countries that have used it
for an explanation.
Turkey's official standpoint on the events of 1915 is that both
Turks and Armenians died during civil strife that resulted in the
forced deportation of Armenians. Turkish officials also maintain
that the number of Armenians said to have died before and during the
deportations is inflated.
If Turkey were to accept the claims of genocide, it would be expected
to pay reparations worth tens of billions of dollars to the families
who lost their loved ones as well as their properties in Turkey during
the events.
tert.am
UNIQUE GOLD COIN FEATURING CILICIAN ARMENIAN KING
PUT UP FOR AUCTION
14.12.15
A unique coin dating back to the period of the Cilician Armenian kind
Levon I (1198-1219) has been put up for an online auction.
The exceptional sample, featuring the king enthroned facing, holding
cross in right hand and branch in left, will be auctioned off on
January 5, according to Coinarchives.com
The starting price of the coin, included in the collection of Dr.
Lawrence A Adams, is US $ 50,000.
mediamax.am
14.12.15
A unique coin dating back to the period of the Cilician Armenian kind
Levon I (1198-1219) has been put up for an online auction.
The exceptional sample, featuring the king enthroned facing, holding
cross in right hand and branch in left, will be auctioned off on
January 5, according to Coinarchives.com
The starting price of the coin, included in the collection of Dr.
Lawrence A Adams, is US $ 50,000.
mediamax.am
ALL CHANGE IN ARMENIA
December 9, 2015 09:49
The headline from Armenia following a much-disputed referendum on
December 6 is that the country has a new constitution and will soon
have a parliamentary system of government. But more people are paying
attention to the short-term politics than to the long-term implications
of the vote.
That is hardly surprising. The new constitution adopted in the
referendum is a massive overhaul of the previous 2005 version, with
only two articles surviving intact. There was no obvious need for
such a big change.
As in most of the post-Soviet space, Armenian politics is an elite
game in which the leaders change the rules to suit themselves, and the
members of the public are mere bystanders. In this instance, President
Serzh Sargsyan's evident motivation for holding a referendum was to
be able to change the game to secure his own political survival.
Over the past five years, the elites have changed the constitutions
in all three South Caucasus countries. In Azerbaijan, there was
no pretense that the change was about anything other than power
preservation. President Ilham Aliyev followed the examples of the
Central Asian states and Belarus in abolishing presidential term
limits, enabling him to secure a third term as leader and rule more
or less in perpetuity.
In Georgia, Mikheil Saakashvili changed the constitution to limit
the powers of the president, just as his second and final term as
head of state was ending. Many anticipated that he was planning to
stay at the center of Georgian politics by making the transition to
the newly strengthened post of prime minister. But that proposition
was never tested. In 2012, Saakashvili lost a parliamentary election,
and his whole power base crumbled.
Now, in Armenia, Sargsyan appears to be attempting a similar maneuver
to ensure himself the chance of a political future after his final
presidential term expires in 2018.
The changed constitution gives Sargsyan the opportunity to stay
at the top of public life if he wants to, by becoming either prime
minister or parliamentary speaker. From 2018, Armenia will have a
new president with largely ceremonial powers who will be elected
for a single seven-year term. Most executive power will devolve to a
prime minister chosen by a slimmed-down 101-seat parliament elected
by proportional representation.
The most controversial provision of the new constitution is Article
89, which stipulates that if no party secures a "stable parliamentary
majority" in legislative elections, there may be a runoff vote to
ensure a governing coalition is elected. Some critics, among them
Robert Kocharian, a former Armenian president and erstwhile ally of
Sargsyan, have argued that this is a dangerous recipe for one-party
rule. (Other critics have said Kocharian is upset only because the
changes thwart ambitions he may have had of returning for a third
presidential term akin to that of Russian President Vladimir Putin.)
There was almost no public debate on the changes. A poll by the
Yerevan-based Advanced Public Research Group found very little
knowledge about what the changes meant, with 71 percent of those
surveyed believing that the amendments would go through regardless
of what happened on voting day.
There were grounds for cynicism. A three-person delegation from the
Parliamentary Assembly of the Council of Europe was critical of the
referendum, citing inaccurate voting lists, a skewed media landscape,
and "allegations of large-scale organized vote buying and carousel
voting as well as pressure on voters."
But it would be wrong to describe the Armenian public as passive. The
"no" campaign, opposed to the ruling elite, was not powerful enough to
stop the changes, but it was vocal enough to kick up a fuss. Social
media have disseminated numerous reports of electoral fraud. These
include the allegation that a one-hundred-twenty-year-old man, born
in the year 1895, was registered to vote.
Such criticism suggests that in 2018, when Sargsyan's term ends,
if he and his team do make a play to keep themselves in power, they
will face a backlash.
The short-term dynamics are worrying. But in the longer term, Sargsyan
may have done everyone a favor. The bigger picture is that Armenia,
a small, well-educated country with a professional class (albeit much
depleted by emigration), is much better suited to a parliamentary
style of government than to the executive power vertical it has at
the moment.
In Georgia, constitutional changes were initiated by one ruling party,
the United National Movement, with one set of motives: to further
party members' own ambitions. The changes were inherited by another
ruling party, Georgian Dream, and the effect has been mostly positive.
Georgian's parliament is stronger than it has been for years, and there
is a real division of powers--often more like a contestation--between
the prime minister and the president.
Eventually, Armenia could get to the same place. Even before that, the
country's 2017 parliamentary elections could be a lot livelier than
anticipated. The new constitutional change frees the opposition from
a straitjacket in which it has been struggling for years: its lack of
a credible individual who could be its presidential candidate in 2018.
Now, the opposition's challenge is slightly less daunting: to build
a proper party machine capable of taking on the ruling Republican
Party in two years' time.
Tom de Waal is a nonresident senior associate with Carnegie Europe.
This commentary was written for Carnegie Europe.
ARMENIA FOREX RESERVES DOWN TO $1.55 BLN IN NOVEMBER
Reuters
Dec 11 2015
YEREVAN Dec 11 Armenia's foreign exchange reserves totalled $1.550
billion at the end of November, down from $1.582 billion a month
earlier, the country's central bank said on Friday.
Its reserves have risen from $1.538 billion a year ago. (Reporting by
Hasmik Mkrtchyan; writing by Maria Kiselyova; editing by Polina Devitt)
arka.am
December 9, 2015 09:49
The headline from Armenia following a much-disputed referendum on
December 6 is that the country has a new constitution and will soon
have a parliamentary system of government. But more people are paying
attention to the short-term politics than to the long-term implications
of the vote.
That is hardly surprising. The new constitution adopted in the
referendum is a massive overhaul of the previous 2005 version, with
only two articles surviving intact. There was no obvious need for
such a big change.
As in most of the post-Soviet space, Armenian politics is an elite
game in which the leaders change the rules to suit themselves, and the
members of the public are mere bystanders. In this instance, President
Serzh Sargsyan's evident motivation for holding a referendum was to
be able to change the game to secure his own political survival.
Over the past five years, the elites have changed the constitutions
in all three South Caucasus countries. In Azerbaijan, there was
no pretense that the change was about anything other than power
preservation. President Ilham Aliyev followed the examples of the
Central Asian states and Belarus in abolishing presidential term
limits, enabling him to secure a third term as leader and rule more
or less in perpetuity.
In Georgia, Mikheil Saakashvili changed the constitution to limit
the powers of the president, just as his second and final term as
head of state was ending. Many anticipated that he was planning to
stay at the center of Georgian politics by making the transition to
the newly strengthened post of prime minister. But that proposition
was never tested. In 2012, Saakashvili lost a parliamentary election,
and his whole power base crumbled.
Now, in Armenia, Sargsyan appears to be attempting a similar maneuver
to ensure himself the chance of a political future after his final
presidential term expires in 2018.
The changed constitution gives Sargsyan the opportunity to stay
at the top of public life if he wants to, by becoming either prime
minister or parliamentary speaker. From 2018, Armenia will have a
new president with largely ceremonial powers who will be elected
for a single seven-year term. Most executive power will devolve to a
prime minister chosen by a slimmed-down 101-seat parliament elected
by proportional representation.
The most controversial provision of the new constitution is Article
89, which stipulates that if no party secures a "stable parliamentary
majority" in legislative elections, there may be a runoff vote to
ensure a governing coalition is elected. Some critics, among them
Robert Kocharian, a former Armenian president and erstwhile ally of
Sargsyan, have argued that this is a dangerous recipe for one-party
rule. (Other critics have said Kocharian is upset only because the
changes thwart ambitions he may have had of returning for a third
presidential term akin to that of Russian President Vladimir Putin.)
There was almost no public debate on the changes. A poll by the
Yerevan-based Advanced Public Research Group found very little
knowledge about what the changes meant, with 71 percent of those
surveyed believing that the amendments would go through regardless
of what happened on voting day.
There were grounds for cynicism. A three-person delegation from the
Parliamentary Assembly of the Council of Europe was critical of the
referendum, citing inaccurate voting lists, a skewed media landscape,
and "allegations of large-scale organized vote buying and carousel
voting as well as pressure on voters."
But it would be wrong to describe the Armenian public as passive. The
"no" campaign, opposed to the ruling elite, was not powerful enough to
stop the changes, but it was vocal enough to kick up a fuss. Social
media have disseminated numerous reports of electoral fraud. These
include the allegation that a one-hundred-twenty-year-old man, born
in the year 1895, was registered to vote.
Such criticism suggests that in 2018, when Sargsyan's term ends,
if he and his team do make a play to keep themselves in power, they
will face a backlash.
The short-term dynamics are worrying. But in the longer term, Sargsyan
may have done everyone a favor. The bigger picture is that Armenia,
a small, well-educated country with a professional class (albeit much
depleted by emigration), is much better suited to a parliamentary
style of government than to the executive power vertical it has at
the moment.
In Georgia, constitutional changes were initiated by one ruling party,
the United National Movement, with one set of motives: to further
party members' own ambitions. The changes were inherited by another
ruling party, Georgian Dream, and the effect has been mostly positive.
Georgian's parliament is stronger than it has been for years, and there
is a real division of powers--often more like a contestation--between
the prime minister and the president.
Eventually, Armenia could get to the same place. Even before that, the
country's 2017 parliamentary elections could be a lot livelier than
anticipated. The new constitutional change frees the opposition from
a straitjacket in which it has been struggling for years: its lack of
a credible individual who could be its presidential candidate in 2018.
Now, the opposition's challenge is slightly less daunting: to build
a proper party machine capable of taking on the ruling Republican
Party in two years' time.
Tom de Waal is a nonresident senior associate with Carnegie Europe.
This commentary was written for Carnegie Europe.
ARMENIA FOREX RESERVES DOWN TO $1.55 BLN IN NOVEMBER
Reuters
Dec 11 2015
YEREVAN Dec 11 Armenia's foreign exchange reserves totalled $1.550
billion at the end of November, down from $1.582 billion a month
earlier, the country's central bank said on Friday.
Its reserves have risen from $1.538 billion a year ago. (Reporting by
Hasmik Mkrtchyan; writing by Maria Kiselyova; editing by Polina Devitt)
arka.am
FITCH: NEGATIVE OUTLOOK FOR ARMENIAN BANKS IN 2016
YEREVAN, December 11. Fitch Ratings downgraded its outlook
for Armenian banks in 2016 to negative.
The rating agency says this negative outlook is driven by the weaker
operating environment in Armenia, with an economic slowdown (Fitch
forecasts slower 1.5% GDP growth in 2015, down from 3.4% in 2014,
before a moderate recovery to 2.5% in 2016), depreciation pressures
and higher interest rates.
Decelerating credit growth, weaker asset quality and softer financial
performance in 9M15 indicate the effects are being felt by the
banking sector.
"We do not expect a material improvement in operating conditions over
2016," Fitch says in its report.
'The sector is highly dollarised (66% of loans and 65% of deposits
were in FX at end-3Q15) and therefore is highly susceptible to the
Armenian dram exchange rate. The dram fell by 17% against the dollar
in 4Q14, causing moderate funding volatility and higher funding costs,
before some stabilisation in 9M15, in part due to the Central Bank
of Armenia's (CBA) interventions.'
The effects of depreciation on the sector's financial metrics have
been moderate so far, although vulnerabilities remain high due to
dollarisation and dram pressures.
The rating agency sees weaker growth prospectsfor economic growth.
Credit growth has slowed, in part due to the CBA's emergency measures
introduced during the market volatility of 4Q14. Fitch analysts also
expect asset quality pressures to persist over 2016.
They also forecast weakening profitability. Margins are constrained by
weaker credit growth and higher funding costs (the net interest margin
declined to 4.7% in 9M15 from 6% in 2013). "We anticipate further
volatility in performance in 2016, resulting from asset-quality
trends," the agency analysts say.
The agency predicts moderate capital ratios. It also says the
sector's external debt remains large (33% of liabilities, or USD2bn),
in particular compared to the country's official international
reserves of USD1.6bn. However, 70% of external liabilities were
long-term loans raised from international financial institutions
and nonresident related parties, including parent bank institutions,
reducing refinancing risks.
"A revision of the sector outlook to stable would require a
stabilisation of the country's economic prospects, driving a
stabilisation of asset quality and easing pressures on the capital,
liquidity and performance of the sector," Fits says in its report. "A
sharp deterioration in banks' asset quality, performance and capital
metrics driven by the weaker economy and dram instability could result
in rating downgrades." ($1 - AMD 485.24).
for Armenian banks in 2016 to negative.
The rating agency says this negative outlook is driven by the weaker
operating environment in Armenia, with an economic slowdown (Fitch
forecasts slower 1.5% GDP growth in 2015, down from 3.4% in 2014,
before a moderate recovery to 2.5% in 2016), depreciation pressures
and higher interest rates.
Decelerating credit growth, weaker asset quality and softer financial
performance in 9M15 indicate the effects are being felt by the
banking sector.
"We do not expect a material improvement in operating conditions over
2016," Fitch says in its report.
'The sector is highly dollarised (66% of loans and 65% of deposits
were in FX at end-3Q15) and therefore is highly susceptible to the
Armenian dram exchange rate. The dram fell by 17% against the dollar
in 4Q14, causing moderate funding volatility and higher funding costs,
before some stabilisation in 9M15, in part due to the Central Bank
of Armenia's (CBA) interventions.'
The effects of depreciation on the sector's financial metrics have
been moderate so far, although vulnerabilities remain high due to
dollarisation and dram pressures.
The rating agency sees weaker growth prospectsfor economic growth.
Credit growth has slowed, in part due to the CBA's emergency measures
introduced during the market volatility of 4Q14. Fitch analysts also
expect asset quality pressures to persist over 2016.
They also forecast weakening profitability. Margins are constrained by
weaker credit growth and higher funding costs (the net interest margin
declined to 4.7% in 9M15 from 6% in 2013). "We anticipate further
volatility in performance in 2016, resulting from asset-quality
trends," the agency analysts say.
The agency predicts moderate capital ratios. It also says the
sector's external debt remains large (33% of liabilities, or USD2bn),
in particular compared to the country's official international
reserves of USD1.6bn. However, 70% of external liabilities were
long-term loans raised from international financial institutions
and nonresident related parties, including parent bank institutions,
reducing refinancing risks.
"A revision of the sector outlook to stable would require a
stabilisation of the country's economic prospects, driving a
stabilisation of asset quality and easing pressures on the capital,
liquidity and performance of the sector," Fits says in its report. "A
sharp deterioration in banks' asset quality, performance and capital
metrics driven by the weaker economy and dram instability could result
in rating downgrades." ($1 - AMD 485.24).
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