YEREVAN, December 10. /ARKA/. The Armenian authorities should stabilize the credit market by attracting preferential loans totaling $ 1-2 billion, economist Ashot Osipyan, founder of the School of Banking Management, told reporters on Wednesday at a video conference organized by the Economic Journalists Club.
According to him, during the lockdown period, banks made certain economic cuts and, therefore, should strengthen risk management, try to manage risks and build new risk models.
“The situation affected the loan portfolio of banks, and although banks in many countries, including the Central Bank of Armenia, went for relief, which was very long and which also affected the banking system,” Osipyan said, adding that, for example, Russia and the countries Central Asia introduced it for a certain specific period.
He noted that the issue of liquidity also arose, which the Armenian banks overcame relatively calmly due to the accumulated reserves in advance and active borrowings from abroad. They did this to preserve liquidity during the coronavirus period, in order to fulfill all customer obligations.
The main problem, according to him, remains the preservation of banking profitability and growth against the background of the fact that banks all over the world have made reductions in staff and revised functions.
“This was also helped by digital transformation – in Armenia, according to some estimates, online trade grew by 40%, which helped banks to quickly cut costs and switch to digital resources,” Osipyan said.
In his words, after the war in Artsakh, the condition of the loan portfolio of Armenian banks will worsen, at the same time, the liquidity problem is aggravated, since during the war period financial markets are closed and confidence is reduced, which leads to problems with banks’ liquidity.
He also noted that there is a currency risk, which is natural and associated with negative expectations, there is no growth in imports and only negative expectations remain, which is normal, but worsens the portfolio and risks of banks.
Also, according to him, there are macroeconomic risks that will significantly affect the banking system.
“How to grow in such a situation, how to keep the bank and ensure at least small growth, since there will not be much growth in such conditions. For this, the state must stabilize the credit market and give a guarantee that they will cover all loans, provide liquidity, provide loans to banks in the amount of $ 1-2 billion,” Osipyan said.
According to him, banks need crediting and, first of all, this task should be solved by the government, and attracting loans at low rates so that banks can provide them at lower than pre-war interest rates.
He also pointed out the need to legislatively, at least temporarily, soften the norms on capital standards, and then return to a strict regime. Similarly, it is necessary to temporarily revise the procedure for loan reservation.
“The state must also solve the problem of stabilizing the real estate market, because if the market “sags,” then there will be problems with payments on loans. We need a long-term program to develop the mortgage market and provide more long-term funds, create demand in the real estate market and take measures to stabilize the market, for example, revising the tax rate on real estate,” Osipyan said. –0—
