Amendments to Resolution No. 39-N of the Central Bank of Armenia on Banking Prudentials

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6.35. Short-term claims against investment funds: /A-1+, A-1 /
F1+, F1 / P-1/
/A-2 / F2 / P-2/
/A-3 / F3 / P-3/
/Below A-3 /
Below F3 / NP/
/A-1+, A-1 /
F1+, F1 / P-1/
20 /A-2 / F2 / P￾2/ 50 /A-3 / F3 /
P-3/ 100
/Below A-3 /
Below F3 / NP/
150 Without a rating 100
6.35.1 Long-term claims against investment funds,
except for investments in investment funds:
/From
AAA/Aaa to
AA-/Aa3/ 20
/From A+/A1 to A-/A3/ 50
/From
BBB+/Baa1 to
BBB-/Baa3/
100 /Below
BB+/- according to
Points 6.36-
6.38/
/From AAA/Aaa to AA-/Aa3/ 20
/From A+/A1 to
A-/A3/ 50
/From
BBB+/Baa1 to
BBB-/Baa3/ 100
/Below BB+/- according to
Points 6.36-
6.38/

6.36.
According to
Point 9.1 of this
Annex
6.37.
According to
Point 9.2 of this
Annex
6.38. 909.09%
𝑅𝑊 =
∑ 𝐴𝑖 ∗ 𝑅𝑖
𝑛
𝑖=1
𝐴
×
𝐴
𝑁𝐴𝑉
𝐴𝑖
𝑅𝑖

𝑅𝑤 =
∑ 𝐴 × 𝑆𝑖 × 𝑅𝑖
𝑛
𝑖=1
𝐴
×
𝐴
𝑁𝐴𝑉
𝑆𝑖
𝑖 − 𝑡ℎ
∑ 𝑆𝑖
𝑛
𝑖=1 = 100%,
𝑅𝑖
VA = V (1-Cc-Cfx- Ci- Cu) Cm,
VA

Cc
Cfx
Ci
Cu
Cm
Cm =
𝑇a−0.25
𝑇𝑐−0.25
,

𝐷𝑖 =
𝑃𝑖
∑ 𝑃𝑖
𝑛
𝑖=1
∗ 𝑆⬚ ,
𝐷𝑖
𝑃𝑖
3. Funds attracted by bank accounts,
deposits, loans, and borrowings from non￾financial organizations not included in Point 2 of this Table (except for the bank's 40%

liabilities under repo agreements and securities borrowing contracts)
3.1. Funds attracted by bank accounts,
deposits, loans, and borrowings from the
Government of the Republic of Armenia, local self-government bodies of the Republic of Armenia, the Central Bank of the Republic of Armenia, foreign governments and central banks having a rating of A- (or A3) and higher provided by Standard & Poor's or Fitch or Moody's rating organizations, foreign local self-government bodies having a rating of AA- (or Aa3) and higher provided by Standard & Poor's or Fitch or Moody's rating organizations, organizations defined by Point 6.6 of Table 1 of Annex 3 of this Regulation, and multilateral development banks (except for the bank's liabilities under repo agreements and securities borrowing contracts) 40%
Table 4.1

Balance sheet or off-balance sheet liabilities generating cash outflows Liability Weight (LW) Outflow Weight (Resident) Outflow Weight (Non￾resident)

1. Funds attracted from physical persons via bank
   deposits, bank accounts, borrowings, and other instruments (except for the bank's liabilities under repo agreements and securities borrowing contracts) LW < 0.01% 10% 20% 0.01% ≤ LW < 0.1% 15% 30% 0.1% ≤ LW < 1% 20% 40% LW ≥ 1% 40% 60%
2. Funds attracted from entities classified as micro,
   small, and medium-sized and individual entrepreneurs—according to Annex 5 of the "Procedure for receiving comprehensive data from banks" approved by Resolution No. 377-N of the Board of the Central Bank of the Republic of Armenia dated 30 December 2014—via bank deposits, bank accounts, borrowings, and other instruments (except for the bank's liabilities under repo agreements and securities borrowing contracts) LW < 0.01% 10% 20% 0.01% ≤ LW < 0.1% 15% 30% 0.1% ≤ LW < 1% 20% 40% LW ≥ 1% 40% 60%
3. Funds attracted via bank accounts, deposits, loans,
   and borrowings from non-financial organizations not included in Point 2 of this Table (except for the bank's liabilities under repo agreements and securities borrowing contracts) LW < 0.01% 40% 50% 0.01% ≤ LW < 0.1% 40% 50% 0.1% ≤ LW < 1% 40% 60% LW ≥ 1% 60% 80%
   25.2. In Table 4.1 of this Annex, the liability weight is calculated using the following
   formula:
   𝐿𝑊 =
   𝐿𝑐
   𝑇𝐿 ∗ 100%

Where:
Lc – are all the bank's liabilities toward the creditor and persons affiliated with them, as of the first day of the reporting period; TL – are the bank's total liabilities, as of the first day of the reporting period.";
39) Supplement Table 1 defined by Point 5 of Annex 13 of the Regulation after Point 3 with
Point 3.1 of the following content:
3.1. Bonds issued by the bank Residual maturity exceeds 1
year
95%
40) In Point 5 of Annex 13 of the Regulation, after the word "weights", supplement with the
words ", except for the foreign currency liabilities specified in Points 4-6 of Table 1 of this Point, which are included in the calculation according to the weights defined by Table 1.1 of Point 5.1 of this Annex";
41) In Table 1 of Point 5 of Annex 13 of the Regulation:
a. in Point 3, replace the words "Legal [entities] not related to the bank" with the words "Legal [entities]", b. in Point 4, replace the words "Physical [persons] not related to the bank" with the word "Physical",
c. from Point 5, remove the words "Not related to the bank,",
d. from Point 6, remove the words "not related to the bank", e. To recognize as void Point 10, f. in Point 14, replace the words "by Paragraph "d" of Point 28.2" with the words "by Sub￾point 1 of Point 28.7", g. in Point 17, after the word "funds", supplement with the words "(including bonds issued by the bank)";
42) Supplement Annex 13 of the Regulation after Point 5 with Points 5.1-5.4 of the following
content:
"5.1. The bank's foreign currency balance sheet and off-balance sheet liabilities participate in the calculation of the bank's available stable funding with the weights defined by Table 1 of this Annex, except for the foreign currency liabilities specified in Points 4-6 of Table 1 of this
Annex, which are included in the composition of the bank's available stable funding
according to the weights defined by Table 1.1 of this Point:";
Table 1.1
Available Stable Funding
Liability
Weight
(LW)
Weight
(Resident)
Weight
(Non￾resident)

1. Funds attracted from physical persons and individual
   entrepreneurs
   LW <
   0.01% 90% 80%

0.01% ≤
LW <
0.1% 85% 70%
0.1% ≤
LW < 1% 80% 60%
LW ≥ 1% 60% 40%
2. Funds attracted from entities classified as micro,
small, and medium—according to Annex 5 of the "Procedure for receiving comprehensive data from banks" approved by Resolution No. 377-N of the Board of the Central Bank of the Republic of Armenia dated 30 December 2014 LW < 0.01% 90% 80% 0.01% ≤ LW < 0.1% 85% 70% 0.1% ≤ LW < 1% 80% 60% LW ≥ 1% 60% 40%
3. Funds attracted from non-financial organizations not
included in Point 2 of this Table
LW <
0.01% 60% 50%
0.01% ≤
LW <
0.1% 60% 50%
0.1% ≤
LW < 1% 60% 40%
LW ≥ 1% 40% 20%
5.2. In Table 1.1 of this Annex, the liability weight is calculated using the following formula:
𝐿𝑊 =
𝐿𝑐
𝑇𝐿 ∗ 100%
Where:
"𝐿𝑐" – are all the bank's liabilities toward the creditor and persons affiliated with them, as of the first day of the reporting period; TL – are the bank's total liabilities, as of the first day of the reporting period.
5.3. In the event that the bank discloses all bondholders as of the first day of the reporting
period, the bonds issued by the bank may participate in the calculation of available stable funding according to the weight of the funds attracted from the given subject. In the event of applying such an approach, banks shall choose the approach specified in this Point to be guided by once a year and shall inform the Central Bank thereof by 31 December of the year preceding each year.
5.4. In the event that the bank chooses the approach defined by Point 5.3 of this Annex, it
shall apply that approach for all bonds, and in the event of a change in the approach, it shall inform the Central Bank, submitting the justification for the latter to the Central Bank."
43) To recognize as void Point 6 of Annex 13 of the Regulation.

ANNEX 1
To Resolution No. 168-N of the Board of the Central Bank of the Republic of Armenia dated 23 September 2025,
Annex 9
To Regulation 2 “On Regulation of Banking,
Essential Economic Prudentials for Banking” approved by Resolution No. 39-N of the Board of the Central Bank of the Republic of Armenia dated 9 February 2007 MINIMUM REQUIREMENTS FOR FINANCIAL INSTRUMENTS INCLUDED IN THE CALCULATION OF ADDITIONAL TIER 1 CAPITAL

1. A financial instrument defined by Point 28.5 of this Regulation shall be included in
   the calculation of the bank's Additional Tier 1 capital if it simultaneously satisfies the following conditions:

1. it is issued and fully paid up;

2. it has not been provided for the purpose of securing the performance of certain
   obligations toward the bank;

3. it is attracted in Armenian drams or in a foreign currency included in the first group,
   except for the financial instrument defined by Sub-point 1 of Point 28.5 of this Regulation, which is attracted only in Armenian drams;

4. the instrument is perpetual;

5. in the event of the bank's liquidation, the claims of the instrument owner (including
   those regarding dividends and interest) are subject to satisfaction after satisfying the claims of all other creditors of the bank, with the exception of the claims of common shareholders;

6. it is not secured by a guarantee or suretyship of persons affiliated with the bank, or the
   owner of the instrument does not end up in an economically or legally more favorable status as a result of their claim being subject to satisfaction—according to the charter or otherwise—earlier than the order of satisfaction defined by law for the given claim in the event of the bank's liquidation. Moreover, the claim of the instrument owner cannot be offset (netted) against other obligations the instrument owner has toward the bank;

7. the instrument does not belong to a legal entity in which the bank is a significant
   participant, or the bank has not directly or indirectly financed the acquisition of that instrument;

8. the contract does not contain such provisions (incentives) that could economically or
   otherwise force (incentivize) the bank to fully or partially repay the amount early. The conversion of the instrument defined by Sub-point 15 of this Annex into shares is not considered an incentive within the meaning of this Sub-point;

9. the instrument may be repaid only:
   a. in cases provided for by the legislation of the Republic of Armenia, or b. if, in the case of repayment, the entire amount is directed toward the replenishment of the bank's charter capital in the form of common shares included in the bank's Common Equity Tier 1 capital, or
   c. if the instrument is repaid or repurchased at the initiative of the bank, and all of the
   following conditions have been simultaneously maintained:
   c1. the bank has received the preliminary consent of the Central Bank for the purpose of repaying the instrument, c2. the difference between the date of repayment of the instrument and the date of the contract for attracting the funds is at least 5 calendar years, except for cases where such changes in tax legislation or regulation have occurred under which the funds might not have been attracted or might not have satisfied the conditions for inclusion in the calculation of Additional Tier 1 capital, and in the justified opinion of the Central Bank, the bank could not have predicted the change at the moment of attracting the funds, c3. the bank has not created expectations of implementing early redemptions;

10. for the purpose of obtaining the preliminary consent mentioned in Sub-point 9 of
    Point 1 of this Annex, the bank shall submit to the Central Bank information or documents justifying the expediency of early redemption of the instrument and the absence of undesirable consequences as a result thereof. The Central Bank, within a 30-day period from the moment of receiving the documents, shall make a decision regarding the granting or refusal of the preliminary consent, about which it shall notify the bank within two business days after the end of the 30-day period. In the event of a necessity to clarify certain facts required by the Central Bank or to make changes or adjustments to the documents submitted by the bank, the 30-day period may be suspended by a decision of the Central Bank. The Central Bank shall grant the preliminary consent mentioned in Sub-point 9 of Point 1 of this Annex if:
    a. the bank replaces the instrument with another instrument satisfying the requirements of this Annex, and such replacement will not negatively affect the bank's financial condition, or b. the bank justifies that its capital adequacy prudentials are sufficiently higher than the minimum limits defined by this Regulation without the instrument mentioned in this Point, and there is no necessity for replacement with a new capital instrument. Moreover, the bank shall not create expectations that the Central Bank will grant the consent;

11. dividends and other payments on the instruments, in full or in part, are not subject to
    payment if such payment would lead to a violation of any of the bank's economic prudentials or the consolidated threshold defined in accordance with the "Procedure for defining and calculating thresholds higher than the capital adequacy prudential limit for commercial banks operating in the territory of the Republic of Armenia" approved by Resolution No. 16-N of the Board of the Central Bank of the Republic of Armenia dated 4 February 2019, or to the improper performance of liabilities not included in the bank's capital; moreover:
    a. the full or partial non-payment of dividends and other payments is not subject to accumulation and payment in the future; b. the partial or full non-payment of payments on the instrument does not constitute non-performance or improper performance of liabilities by the bank;
    c. no legal document between the bank and the owner of the instrument may provide
    for any restriction for the bank in the event of full or partial non-payment of dividends and other payments, nor can any legal document provide for granting the right to provide for such restrictions to the owner of the instrument, except where the restriction relates to the payment of dividends on shares issued by the bank or the implementation of payments on other instruments included in the calculation of the bank's Additional Tier 1 capital. Moreover, the restriction mentioned in this Paragraph regarding the payment of dividends on shares or payments on instruments included in the calculation of Additional Tier 1 capital may relate only to the period during which the dividend or other payments due on the given instrument were not paid in full or in
    part.

12. dividends on preferred shares are subject to payment only from the bank's net profit or
    from funds formed at its expense; moreover, dividends are paid only in cash;

13. the amount of payments on the given instruments cannot be made dependent on the
    bank's rating, any indicator characterizing the financial condition, or the actual size of payments previously made on the instruments;

14. there is no agreement (decision, contract, accord) by which the owner of the
    instrument will have the right to provide for any restriction or obstacle to the further issuance or attraction by the bank of additional common or preferred shares or other instruments included in the composition of capital;

15. it is provided by a legal document that in the event of deterioration of the bank's
    financial condition, the liability is written off or repaid by the bank in the amount of the corresponding sum, and the owner of the instrument undertakes to immediately direct the repaid sum toward the replenishment of the bank's charter capital (hereinafter: conversion) in the form of common shares included in the composition of the bank's Common Equity Tier 1 capital. Moreover, within the meaning of this Sub-point, a corresponding sum is considered the amount which, in the opinion of the Central Bank, is necessary to eliminate (mitigate) the grounds for the deterioration of the bank's financial condition, but not more than the nominal value or the principal amount of the instrument. If the instrument is attracted in foreign currency funds included in the first group, then the sum directed toward the replenishment of the bank's charter capital is converted into Armenian drams based on the average exchange rate of the Armenian dram against the given foreign currency formed in the currency markets and announced by the Central Bank for the day of conversion;

16. the legal document clearly defines the ratio according to which the instrument must be
    converted into common shares included in the composition of Common Equity Tier 1 capital for the purpose of implementing the conversion defined by Sub-point 15 of this Annex;

17. any legal document (except for the bank's charter) regulating the relations between the
    bank and the owner of the instrument in connection with the instrument shall define that in the event of any requirements (conditions) being changed, the preliminary consent of the Central Bank is necessary, without which the changes shall not have binding legal force and shall not create legal consequences for the parties.

2. Within the meaning of Sub-point 15 of Point 1 of this Annex, a deterioration of
   financial condition is considered the emergence of any of the following situations:

1. the bank's Common Equity Tier 1 capital adequacy does not exceed the limit
   of 7.061%;
2. the Central Bank notifies the bank in writing that the assessment calculated by
   the Central Bank has deteriorated or may deteriorate beyond the defined extent;
3. the Central Bank notifies the bank in writing that without the assistance of the
   Central Bank or other state assistance, any of the grounds defined by the Law "On Bankruptcy of Banks, Credit Organizations, Investment Companies, Persons Providing Crypto-asset Services, Investment Fund Managers, and Insurance Companies" will arise (or are likely to arise).

3. Irrespective of the conversion procedure defined by Sub-point 16 of Point 1 of this
   Annex, before including the amount (or a part thereof) of the instrument specified in
   Sub-points 2 and 3 of Point 28.5 of this Regulation in the calculation of the bank's total capital, the person (affiliated persons) providing the funds must obtain the preliminary consent of the Central Bank regarding the acquisition of a significant participation in the bank—in accordance with Regulation 1 'On Procedures for Licensing, Registration, Granting Consent and Permission, Professional Adequacy Testing and Qualification in the Sphere of Banking' approved by Resolution No. 145- N of the Board of the Central Bank of the Republic of Armenia dated 12 April 2005 (except for the case defined by Point 4 of this Annex)—if, as a result of the attraction, the following indicator (I) exceeds 10, 20, 50, or 75 percent:
   I =
   FI + SVinstr
   SV+FI

• 100%
  Where:
  FI – is the nominal value or principal amount of the funds attracted by the given instruments from the person (affiliated persons) providing funds through the instruments specified in Sub￾points 2 and 3 of Point 28.5 of this Regulation;" SVinstr – is the nominal value of the voting participation (if any) held by the instrument owner (affiliated persons) in the bank's charter capital; SV – is the nominal value of the bank's voting shares. Moreover, preferred shares that grant voting rights only in certain cases defined by law are not included in the calculation of voting shares defined by this Point.If the instrument is attracted in foreign currency funds included in the first group, then in the calculation of this Point, the nominal value or principal amount of the financial instrument is converted into Armenian drams based on the average exchange rate of the Armenian dram against the given foreign currency formed in the currency markets and announced by the Central Bank for the day of attraction.

4. The preliminary consent of the Central Bank is not required in the event that, as a
   result of attraction through the instrument, the indicator calculated by Point 3 of this

Annex exceeds a certain limit defined by the given Point, but the contract has defined
that:

1. the owner of the instrument shall not acquire voting shares exceeding the given limit;
2. the owner of the instrument realizes that in the event of conversion of the instrument,
   the part exceeding the defined limit is directed to the bank's share premium or profit for the purpose of supplementing the amount necessary to eliminate (mitigate) the grounds for the deterioration of the financial condition in accordance with Sub-point 15 of Point 1 of this Annex.

5. In the case defined by Point 2 of this Annex, the instruments included in the
   composition of the bank's Additional Tier 1 capital—in accordance with Sub-point 15 of Point 1 of this Annex—are written off or converted into shares included in the composition of Tier 1 capital, or are directed to the share premium or profit (in the case defined by Point 4 of this Annex) in the following amount:
   𝐴𝑖 =
   𝑃𝑖
   ∑ 𝑃𝑖
   𝑛
   𝑖=1
   ∗ 𝑆⬚ ,
   Where:
   "A_i" – is the amount of the required sum for write-off or conversion into capital for the i-th financial instrument; "P_i" – is the initial principal amount or nominal value of the i-th financial instrument included in the composition of the bank's Additional Tier 1 capital; "n" – is the number of financial instruments included in the composition of the bank's Additional Tier 1 capital; "S" – is the amount of the sum necessary to eliminate (mitigate) the grounds for the deterioration of the bank's financial condition in accordance with Sub-point 15 of Point 1 of this Annex.