Share of non-performing loans in Armenia doesn’t exceeds 7.5 percent

10.07.2017 19:15
Share of non-performing loans in Armenia doesn’t exceeds 7.5 percent

YEREVAN, July 10. /ARKA/. The share of non-performing loans in Armenia doesn’t exceeds 7.5 percent, Arthur Javadyan, head of the central Bank of Armenia said Friday at an extraordinary session of the National Assembly.

In his words, this is the lowest indicator, compared with other countries of the region and with some developed European countries.

Assets of Armenia’s banking sector total AMD 4 trillion, according to the latest reports, and credit exposure amounts to AMD 2.5 trillion.

“There are also certain assets accumulated in the system, but we conduct careful inspections,”
Javadyan said. “Non-performing assets should be written off once in every six months, otherwise this will shrink capital and bring problems to banks. In this case, shareholders have to inject more resources, what not always is beneficial, or to sell assets.”

Speaking about international loans, Javadyan pointed out the widespread wrong opinion that they dominate total assets saying that, in fact, they don’t exceed 9%, and the remaining 91% are generated in Armenia and taken from other assets financial resources and savings in deposits.

He said interest rates on international loans are in tune with market rates.

“In the course of negotiations with international partners, we try to lower rates to make them affordable at Armenia’s domestic market,” he said. “More than that – we have achieved the provision of these loans in drams, and this shields commercial banks from currency risks, since they are borne by the central bank, and also protects market rates from impacts.”

The share of non-performing loans at Armenia’s banks stood at 7.2% in May 2017 and at 9.8% in May 2016. ($1 – AMD 479.82). --0-----


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