Assessment of the Profitability Indicators of Armenian Commercial Banks and the Forecast of Possible Scenarios to Increase Profitability

Purpose: The main purpose of the study is the comparative analysis of total capital, total assets, net profit, return on assets (ROA), return on equity (ROE) and net interest margin (NIM) of 17 commercial banks operating in Armenia for several years are presented, the advantages and disadvantages of the banks with high and low results in the above-noted indicators have been briefly commented on. Theoretical framework: Currently, the banking system of Armenia is the most developed one in comparison with other sectors of the economy, as the processes of attracting deposits, providing loans and fulfilling the standards set for commercial banks are regulated in line with the world experience. The object of study is operational environment of the banks. Design/methodology/approach: The profitability indicators are considered to be the most basic tool for assessing the efficiency of operations carried out by commercial banks. Methodological tools of the study methods were interest income, interest expense and average annual return on profitable assets, which were analyzed separately. Findings: The relevance of this scientific problem decision is that the negative consequences the COVID-19 pandemic within the business environment of the Armenian banking system have been studied. Research, Practical & Social implications: In the context of new economic relations, the banking system holds an important part in ensuring the economic growth and economic development of any country, including the Republic of Armenia. Possible ways to increase the profitability of the Armenian banking system were suggested in this study, the existing challenges of the banking system were identified. Originality/value: Based on the results of the research of the profitability indicators of the RA banking system and the conclusions drawn, several ways of increasing the profitability of banks were proposed.