YEREVAN, November 6. /ARKA/. In the first half of 2019, some 5.1 percent of the loans that banks in Armenia held were non-performing, Andranik Grigoryan, head of a Central Bank department overseeing the financial system’s stability and development, told reporters on Tuesday.
According to him, the figure was quite low across the region and compared to ‘similar countries. “This figure is an indication that the ease in lending conditions has led to an increased financial intermediation,” Grigoryan said.
He also said that the banks are in active contact with customers so as not to accumulate the debt burden, and when such cases occur, banks try to exploit appropriate mechanisms so as not to impede financial stability.
He said usually the percentage of non-performing loans increases against the background of strengthening financial stability, however, the Armenian trend is that the share of non-performing loans decreases against the backdrop of the dynamic development of the banking sector and a significant increase in financial intermediation, accompanied by a fairly manageable level of non-working assets.
“We have had the opportunity to keep the financial system healthy enough, while increasing the availability of various financial products for our economy,” said Grigoryan.
He also pointed out a growth trend in the ratio of lending provided to the economy to GDP.
“According to the third quarter of 2019 data, a significant increase in loans was recorded, which indicates a growing level of financial intermediation. This suggests that financial institutions fulfill their tasks improving the population’s access to financial instruments and resources,” Grigoryan said.
According to the Central Bank, the lending to the economy in the first half of 2019 stood at. 389 trillion drams. ($1 – 476.57 drams). -0-
