The banking system, as the most trusted financial institution for saving’s accumulation, is an important source for investment generation. One factor in the competitiveness of any country is the developed banking system, which shows several indicators. The first question is how much is the volume of lending by the banking system in relation to gross domestic product per year.
According to Central Bank data, this index recorded a significant growth in the after the financial crisis in 2008-2009, amounting to almost 40% since 2010. In parallel, the assets of the banking system increased and amounted to almost 80% in 2016.

The index of banking system (%), on Central Bank data
1. The banking system's assets/GDP
2. The banking system's loans/GDP

Based on the statistics, we can assume that only 40% of produced goods and services are financed through the banking system. In comparison with a number of indicators allows seeing some indicators in terms of competitiveness. World Bank data shows that in most developed countries, the private sector lending by the banking system exceeds GDP. Armenian index is near to developing and low-income countries.

-Lendings by the banking system to private sector/GDP (%), on World bank data

It should be noted that the banking system had been impacted by the currency crisis in the late 2014's. According to the Central Bank, in 2015 the total amount of liabilities of the banks has not only increased, but also a certain decline. The same can be said about the total assets. Only in early 2017 assets have shown relatively higher growth rates, which indicates a recovery in demand for loans.

-The balance indicators of Armenian banking system, thousand AMD on RA CB data

1.General assets    2.general liabilities

All this is reflected in the banks' balance indicators. The monthly reports in 2015 show that the crisis has had a serious impact. That shows the increasing negative number of retained earnings, or loss at current period.

- The balance indicators of Armenian banking system, thousand AMD on RA CB data
1. Retained earnings (loss) at current period, cumulative
2. Retained earnings (loss) at previous period, cumulative

However, in the first quarter of 2017, the banking sector indexes regained their growth rates. the volume of loans and deposits are gradually increasing, which is also the result of central bank policy.

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