YEREVAN, March 6. /ARKA/. Armenia's banking system may face certain risks, said Edvard Sandoyan, former Minister of Finance and Economy, now the Director of the Institute of Economy and Business at the Russian-Armenian University.

"The net profit of the banks in 2022 turned out to be the highest in the history of independent Armenia - about 263.5 billion drams, which is three times more than the indicators of the previous year," Sandoyan noted on Sunday speaking at an economic forum hosted by the Russian-Armenian University.

The former minister pointed to a number of disturbing factors. "Thus, bank assets increased 18.8 times, but the lending practically did not grow - only by 3%. It means that the main activity of banks which led to such high profits is not connected with lending to the economy but is conditioned by the sphere of service, commission income and currency conversion," Sandoyan stressed.

He wondered - can these processes continue in 2023? "Yes, they can, but there are risks and they are serious enough," the former minister noted.

In his speech, Sandoyan also mentioned a significant inflow of money to Armenia thanks to the arrivals of tens of thousands of foreign, mainly Russian nationals, to Armenia.

"In 2022, $5.2 billion were remitted to Armenia, which is 2.46 times more than in the previous year. Inflows from Russia quadrupled and reached $3.6bn with net inflows from Russia increasing 16.8 times," he said.

Sandoyan noted that he expected this trend to change in January of this year, at least in terms of the behavior of the foreign nationals.

"However, it turned out that in January 2023, the net inflow of cash receipts increased more than 13 times - up to $170 million," the expert said.

He stated that all of the above shows the unprecedented processes taking place in Armenia's economic system. ($1 - 388.49 drams) --0--