Fitch: Armenian banking resilient

Fitch Ratings said in a special report that the Armenian banking system has been relatively resilient amid the global financial crisis due to its low integration into international capital markets, substantial capital and liquidity buffers and increasing foreign ownership.

Nevertheless, the sharp downturn of the undiversified Armenian economy, a decline in the volume of transfers and investments, especially from Russia, and the 20% devaluation of the Armenian dram in March have negatively affected Armenian banks' asset quality and performance, the agency said.

The banks' small size and limited diversification of risks and revenues also remain an underlying credit weakness, the agency said.

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