Structural and profitability shifts in Armenia’s banking sector

This paper examines structural transformations and profitability in Armenia’s banking sector from 2014 to 2024. The objective is to analyze the evolution of the financial model within the framework of an emerging economy. The study identifies a pivotal transition from credit-driven growth to a more sustainable, savings-supported paradigm. Key findings reveal a 31-fold increase in banking profitability and sustained macroeconomic resilience despite external geopolitical shocks. The research demonstrates that Armenia’s banking sector, characterized by high competition (HHI 876–1125), maintains stability through diversified asset allocation and internal savings, offering a robust model for understanding the development of emerging financial systems.