YEREVAN, February 17. /ARKA/. Daniel Azatyan, the head of the Union of Banks of Armenia, identified mortgage and consumer lending as areas that require attention in the context of the risk of credit market overheating.
Speaking about the mortgage lending market, he noted that, according to the Central Bank, real estate in Armenia is considered overvalued by approximately 20-25%.
“There are two scenarios: either this 25% overvaluation stabilizes over several years, or there will be a 20-25% decline. However, the financial system will be able to withstand these risks,” Azatyan said, responding to a question from ARKA news agency.
The head of the Union of Banks of Armenia admitted that other economic consequences could arise, but they would not have a significant impact on the banking system and its stability.
Regarding the second risk area, Azatyan pointed to the growth in the volume of consumer loans and their share in the system.
“The scale of these loans means that in the event of an economic downturn or a deterioration in the economic or business environment, the risks associated with consumer loans will manifest themselves immediately, as they are short-term,” he said.
However, according to Azatyan, the growth in these loans has slowed in recent years, and the volume of loans issued to businesses has increased, which is curbing these risks.
The loan portfolio of the Armenian banking system reached 7.9 trillion drams by the end of 2025, up from 6.4 trillion drams in the same period of 2024. Consumer loans account for the largest share of loan investments – 23.2% (volume 1.8 trillion drams, annual growth of 29.6%). Mortgage lending accounts for 21.3% (volume 1.7 trillion drams, growth of 13.2%). ($1 = 377.67 drams).
