YEREVAN, June 12 /ARKA/. The ability of Armenia’s banking sector to absorb risks is quite strong, as evidenced by the sector’s regulations, Andranik Grigoryan, the head of a Central Bank department in charge of stability and development of the financial system, told reporters on June 11.

According to him, last year’s financial risks came largely from the external sector, while macroeconomic developments and growing uncertainty in Armenia’s partner countries still adversely affect its exports and income.

He said despite external and internal developments, the financial system of the country recorded a substantial growth along with high capitalization and liquidity. As for financial intermediation, it deepened due to an increase in lending.

He said also if one looks at non-performing assets, he could see they were declining last year. According to the results of stress tests, conducted by the Central Bank, the banking sector is sufficiently liquid and capitalized, being also capable of absorbing possible losses in case of risks and ensure the continuity of activities.

Grigoryan said also that the capital adequacy ratio of the banking system remains high at 17%, with the Central Bank's standard being set at 12%, while the Basel standard is 8%.

He said also the high liquidity of the banks is necessary for the servicing of the economy and stressed d that 2018 was very important in terms of ensuring financial stability. -0-