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CB’s decision to lower capital adequacy standard prompted by increasing lending

YEREVAN, February 29. /ARKA/. The Central Bank’s decision to lower the capital adequacy standard of Armenian banks was prompted by the latter’s increasing lending, Vigen Barseghyan, deputy director general of Areximbank – Gazprombank Group, told ARKA. He said in 2011 alone the banks’ outstanding loan portfolio surged by more than 30%, adding also that corporate loans of Areximbank jumped by 60%.

The Central Bank of Armenia lowered the threshold standard of capital adequacy to 12% from 19% in 2011 October. In 2010 January it was set at 29.1%. Barseghian said that at the moment the actual standard of capital adequacy is close to being ‘acceptable’ which means that banks do not take risks above normal.

Areximbank-Gazprombank Group (formerly Areximbank) was established in 1998 to handle financial flows between Armenia and Russia. It is a principled member of VISA International and MasterCard International payment systems. In 2007 it joined Armenian ArCa payment system. The bank is owned fully by Russian Gazprombank and has 6 branches in Yerevan and 9 in regions. According to its press release, on October 1 its credit portfolio was 42.5 billion Drams. -0-

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