YEREVAN, February 23. /ARКА/. International rating agency S&P Global Ratings assesses risks to Armenia’s financial stability as contained.
“The banking sector remains well capitalized and highly profitable, supported by significant net interest income, while lending growth exceeds 20% year-on-year, driven primarily by consumer and mortgage lending,” the agency’s review states.
It notes that the gradual phasing out of tax breaks on mortgage interest and macroprudential tightening measures have begun to curb housing demand, particularly in Yerevan.
“The dollarization of banks’ assets and liabilities has been declining in recent years: currently, about a third of domestic deposits and loans are denominated in foreign currency,” the agency’s analysts explain.
