YEREVAN, March 10. /ARKA/. Non-performing loans soared from 3.7 percent at the beginning of 2015 to above 9 percent towards the end of the year, the World Bank says in its ‘ Armenia’s Monthly Economic Developments’ report.
Higher dollarization and currency mismatches in the balance sheet pose risks to banking sector stability and profitability.
«Total lending declined in 2015 by 3.1 percent with FX-denominated loans suffering the largest contraction reflecting expectation of further dram appreciation,» the World Bank says in its report.
«Commercial banks deposited excess forex at the CBA, which contributed to an increase in gross reserves by US$282 million over 2015. 2016 is expected to be a challenging year for the banking sector as the new requirement for minimum capital will enter into force on January 1, 2017.»
According to the WB forecast, 2016 is expected to be a challenging year for the banking sector as the new requirement for minimum capital will enter into force on January 1, 2017.
On January 1, 2017, the Central Bank of Armenia increased its requirement for commercial banks’ total capital to AMD 30 billion from former AMD 5 billion.
According to the regulator, this measure will lead to consolidation of banks, improve their services and form a healthy competition environment in the banking sector. –0—
