YEREVAN, November 19. /ARKA/. The decline in Armenian banks’ net profits is caused by the drop in the banks’ interest rate spread, chairman of the Central Bank Arthur Javadyan said in an interview with ‘Zhamanak’ (Time) daily.
According to Central Bank’s data, the net profit of Armenian banks in the first 9 months of 2015 slashed by 53.4% from the year before to 13.129.7 billion drams. Of 21 banks operating in Armenia only 14 posted income for the reporting period.
The Central Bank chairman noted that the banks had to cut interest rates on loans and at the same time, they had to keep interest rates on deposits relatively high.
“If rates on deposits remain at the same level, while interest rates on loans are reduced, it has a strong pressure on the banks’ profits. But now, after recent decisions of the Central Bank, these issues have been solved,’ he said.
According to Javadyan, the regulator’s latest decisions were about reserve requirements. In particular, he noted that the regulator has exempted funds attracted form abroad, long-term loans as well as proceeds from issuance of bonds from the obligatory reserve requirements. “Thus, today we have better conditions than we had last year,’ he said.
According to Javadyan, the banking system of the country has been affected by the overall economic situation in the country. -0-
