YEREVAN, February 23. /ARKA/. On Saturday, Armenian Finance Minister Tigran Davtyan, speaking at a round-table discussion held this weekend in Tsakhkadzor, Armenia, as part of Bridge-2010, seventh international economic forum, said he is not so happy about Armenian banks’ conduct in 2009.
He said that the government made every effort and used every resource to shield the financial system from blows of the global crisis, but saw no adequate reaction from banks.
Noting that it is his subjective view, the minister blamed banks for sluggishness and indifference.
“We took care of banks, spent immense funds for saving the system, but banks proved to be ungrateful – they didn’t support us and didn’t continue crediting economy,” he said.
They stopped lending and drove interest rates up, and this hobbled the economy. The government, seeing that, had to interfere – it attracted immense resources from the outside and provide them also to banks and gave state guarantees.
Additional financing of the 2009 and 2010 state budgets are planned at $1 billon. The World Bank pledged $60 million, Asian Development Bank $80 million, International Monetary Fund $305 million and Russia $500 million to Armenia.
“In fact, the lending market owes its rally in late 2009 to the funds received by banks from the government on good conditions,” Davtyan said. The minister said that things have already changed, the lending is growing and economy is recovering.
Armenian banks’ credit portfolio totaled AMD 746.9 billion by late December 2009 against AMD 635.8 billion earlier that year.
“We were often blamed for excessive support for financial and banking systems, but we did it not for the love, but because this is a necessary condition for recovery of the economy. Otherwise, things could get dangerous and strike the economy hard,” Davtyan said adding that the banking system is almost the only area that has come out of the crisis recovered and stronger than before. Twenty two banks function in Armenia now.
According to ARKA News Agency’s data, Armenian banks’ assets totaled AMD 1346.1 billion and liabilities AMD 1059.3 billion by late December 2009.
The banks’ total capital amounted to AMD 286.2 billion and aggregate liabilities to clients AMD 717.2 billion by late December.
Their net profits totaled AMD 15.4 billion after taxation. ($1 = AMD 381.75). M.V. –0–
