{"id":93758,"date":"2015-12-17T09:24:00","date_gmt":"2015-12-17T09:24:00","guid":{"rendered":"https:\/\/armbanks.am\/2015\/12\/17\/243996\/"},"modified":"2024-12-15T13:21:33","modified_gmt":"2024-12-15T13:21:33","slug":"fitch-negative-outlook-for-armenian-banks-reflects-general-things-in-countrys-economy","status":"publish","type":"post","link":"https:\/\/armbanks.am\/en\/2015\/12\/17\/93758\/","title":{"rendered":"Fitch negative outlook for Armenian banks reflects general things in country\u2019s economy"},"content":{"rendered":"

YEREVAN, December 17. \/ARKA\/.<\/strong> Fitch Ratings\u2019 negative outlook for Armenian banks reflects general things in the country\u2019s economy, Samvel Chzmachyan, the chairman of the Union of Banks of Armenia, told ARKA News Agency.<\/p>\n

\u201cThe Fitch outlook for Armenian banking sector\u2019s prospects in 2016 was due rather to macroeconomic indicators than to problems inside of the sector,\u201d he said.<\/p>\n

Chzmachyan thinks the country\u2019s slow economic growth had adverse impacts on the banking sector.<\/p>\n

Among negative factors, he singled out western sanctions against Russia, which led to reduction of money transfers from Russia to Armenia. As the inflow of private money transfers dwindled, Armenian residents\u2019 payment ability fell.<\/p>\n

According to the National Statistical Service of Armenia, individual transfers contracted by 32.2% over the first ten months of this year, and those coming from Russia reduced 38%.<\/p>\n

Chzmachyan said the share of lending to individuals is not small in Armenian banks\u2019 aggregate loan portfolio.<\/p>\n

The Central Bank of Armenia says loan extended to households totaled AMD 760.3 billion and made up 38.6% of the aggregate loan portfolio.<\/p>\n

The head of the union also said that corporate clients, particularly exporters, faced difficulties as well.<\/p>\n

Armenia\u2019s exports shrank because the ruble\u2019s devaluation against the dollar was more dramatic that that of the dram.<\/p>\n

The population\u2019s payment ability was stricken hard by these factors. \u201cPeople faced difficulties in repaying their loans,\u201d Chzmachyan said.<\/p>\n

As a result, the share of nonperforming loans in banks\u2019 loan portfolios grew and the quality of commercial banks\u2019 assets worsened.<\/p>\n

According to the central bank\u2019s figures, the share of nonperforming loans in the banns\u2019 aggregate loan portfolio rose to 8% in October 2015 from 6.7% in October 2014.<\/p>\n

Besides, world prices for nonferrous metals dramatically sank striking hard at Armenia\u2019s economy, since they make up one third of the country\u2019s exports, Chzmachyan said.<\/p>\n

\u201cI think these outside factors will remain also in the next year, and therefore Fitch outlook is quite understandable,\u201d he said.<\/p>\n

But despite the mentioned difficulties, he said, Armenian banks are still liquid, since they became more cautious in lending money.<\/p>\n

They don\u2019t want to run such a risk of extending loans to everybody. They are now guided by principle \u2018the less profit the higher repayment\u2019.<\/p>\n

At the same time, Chzmachyan said not everything in the Fitch outlook was negative, particularly the fact that 70% of Armenian banks\u2019 foreign liabilities are long-term loans attracted from international institutional organizations and nonresidents affiliated to banks (parent banks).<\/p>\n

\u201cThis allows the banks to reduce refinancing risks and prolong repayment deadlines,\u201d he said. \u201cLiquidity situation remains quite controllable also thanks to the central bank\u2019s policy.\u201d<\/p>\n

The regulator says the Armenian banks\u2019 liquidity indicator stood at 27.8% in October 2015, while in November 2014 it went down to 24-25%.<\/p>\n

The central bank says Armenian banks\u2019 aggregate assets have shrunk 2.1% since the beginning of this year to AMD 3 318.3 billion in September, liabilities have reduced 3.6% to AMD 2 807 billion and credit investments 4.3% to AMD 2 074 billion, while the banks\u2019 aggregate capital has grown 7.2% to AMD 511.3 billion. Their profits totaled AMD 13 129.6 million in Jan-Sep 2015 against AMD 28 160.4 million in Jan-Sep 2014 \u2013 a 53.3% year-on-year decline. ($1 \u2013 AMD 483.66). —0—-<\/p>\n","protected":false},"excerpt":{"rendered":"

Fitch Ratings\u2019 negative outlook for Armenian banks reflects general things in the country\u2019s economy, Samvel Chzmachyan, the chairman of the Union of Banks of Armenia, told ARKA News Agency<\/p>\n","protected":false},"author":1,"featured_media":160056,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","tstyn_error":""},"categories":[12139,9216],"tags":[15837,12172,15645],"class_list":{"0":"post-93758","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy-en","8":"category-news","9":"tag-armenia-2","10":"tag-economy-en","11":"tag-fitch-2"},"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/93758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/comments?post=93758"}],"version-history":[{"count":0,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/posts\/93758\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/media\/160056"}],"wp:attachment":[{"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/media?parent=93758"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/categories?post=93758"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/armbanks.am\/en\/wp-json\/wp\/v2\/tags?post=93758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}