Armenian bank securities portfolios hit 1.93 trillion drams, down 9.5% this year

Armenian commercial banks held a combined investment portfolio of 1.93 trillion drams in securities at the end of the second quarter of 2025, according to data published by ArmBanks.am — marking a 9.5 percent decline from the start of the year and signaling a notable reallocation of capital across the country’s banking sector.

A separate figure cited in the same reporting puts total securities investments at 1.92 trillion drams for the quarter, a marginal difference likely reflecting methodology or timing of data consolidation. Either way, the direction is clear: Armenian banks have pulled back from securities holdings at a meaningful pace over the first half of the year.

A contraction of roughly 200 billion drams since January

The 9.5 percent year-to-date drop implies that Armenian banks entered 2025 with securities portfolios worth approximately 2.13 trillion drams in aggregate. The drawdown of roughly 200 billion drams over six months is substantial in the context of a banking system that, while growing, remains concentrated among a relatively small number of licensed institutions supervised by the Central Bank of Armenia.

The data does not specify the composition of the portfolio — whether the decline is driven primarily by reduced holdings in Armenian government bonds, foreign sovereign debt, or corporate instruments. Nor does the reporting indicate whether banks are redeploying capital into loan books, which have been expanding in recent quarters, or simply allowing maturing instruments to roll off without reinvestment.

What the figures do suggest is a sector-wide shift in asset allocation strategy, at a moment when Armenian banks are navigating elevated interest rate conditions and strong credit demand from both retail and business borrowers.

Lending growth may be drawing capital away from fixed income

Armenia’s banking sector has posted consistent loan portfolio growth over the past two years, driven by mortgage lending, SME financing and consumption credit. If deposit inflows are being channelled into loans rather than securities, the decline in the investment portfolio would be a rational, commercially driven outcome rather than a sign of stress.

For foreign investors and financial institutions assessing Armenia’s banking sector, the shift carries practical implications. A smaller securities buffer can reduce liquidity ratios, though the Central Bank of Armenia’s regulatory framework requires banks to maintain prudential liquidity and capital adequacy standards. Whether individual banks are approaching those thresholds is not indicated in the available data.

ArmBanks.am did not break out figures by individual institution, so the portfolio contraction cannot be attributed to any single bank or ownership group.

Prepared by the Sevan Business editorial desk. This content was produced by aggregating, reviewing and re-editing information published in the sources cited below.

Source: ArmBanks.am