YEREVAN, September 8. /ARKA/. The share of problem loans of Armenian banks may grow from the current 6.3% to 10% of the total loan portfolio, Chairman of the Central Bank Martin Galstyan told reporters on Tuesday.

“According to our estimates, due to the 'credit holidays' awarded to borrowers to help them to overcome  the consequences  of the coronavirus crisis, a decrease in borrowers' income may lead to a situation where the share of problem loans may increase to more than 10%,” Galstyan said.

He said "credit holidays" in fact allow borrowers not to fulfill their obligations to banks in a certain period, while the banks  continue to fulfill their obligations to depositors, and, in fact, the stable process of the banking system is disrupted.

As for the dissatisfaction of citizens with loans, he divided them into two groups. A small group believes that they were treated unfairly because the terms do not correspond to reality.

“There are very few of these cases, and we urge everyone to solve problems with the bank  or contact the financial ombudsman. If the issue is not resolved, then the Central Bank is ready to assist in its solution,” Galstyan said.

The second category, according to him, is the main part with which problems arise: people deliberately received  loans at high interest rate, after which, due to a decrease in income, they are unable to service them.

According to him, in this case, the Central Bank does not have tools of  assistance, since these are agreements between two entities that have undertaken obligations, and the Central Bank cannot upset the balance.

“We do not want to be tough, but this is a question of  public and social consensus. We cannot expect the system to work normally if it is being constantly hit,” Galstyan said.

He noted that today the profitability of the banking system is about 9%, not counting the delayed obligations  and the effect of the credit holidays, as a result of which the indicator will significantly decrease.

Today there are 17 commercial banks in Armenia. The loan portfolio of Armenian banks exceeded 3.6 trillion drams in the first half of 2020. ($1 - 488.57 drams) -0-