Wednesday, May 12 2010 14:35
Credit exposure of Armenian banking system up 6.7% to $2.1bn or 58.6% of assets for Q1 2010
ArmInfo. Credit exposure of the Armenian banking system totaled 830.6bn drams ($2.1bn) as of March 31 2010 or 58.6% of assets. This indicator was up 23% per year and 6.7% for Q1 2010 versus 4.6% growth for Q1 2010.
Ranking of Armenian Commercial Banks prepared by Agency of Rating Marketing Information (ArmInfo) says the share of lending to the economy sectors was 62.4% of total lending or 518.2bn drams ($1.3bn) growing 30.4% per year and 10.7% for Q1 2010 (versus 19% growth for Q1 2009). Total lending to individuals grew 6.4% per year and 4.4% for Q1 2010 (versus 13% decline for Q1 2009) to 276bn drams or $689mn as of March 31 2010 (33.2% of total credit exposure).
Trade finance of commercial banks for Q1 2010 grew 22%, loans provided to the transport and communication sector grew 18%, lending to the service sector grew 14%, agricultural loans grew 11% and construction financing grew 5%. Mortgage lending grew 4.3% for Q1 2010, whereas auto loans fell 8.4%. Top three banks by lending to the economy are Armbusinessbank - 66.4bn drams (84% of total), Ameriabank - 53.7bn drams (79.3% of total), and VTB Armenia - 49.1bn drams (60.6% of total). ProCredit Bank loans to the economy in total credit portfolio made up 91.4% or 12.3bn drams (15th position). BTA Bank showed the lowest share of lending to the economy in total - 29.6% or 1.2bn drams.
ACBA-Credit Agricole Bank is in the lead by lending to individuals - 56.9bn drams (58.3% of total lending, inclusive of agricultural loans for farmers). VTB Bank (Armenia) is on the second position with 27.7bn drams (34.2%) and Unibank is on the third position by 26.8bn drams (40.1% of total). BTA Bank (Armenia) is in the lead by the highest share of lending to individuals (mostly consumer loans) in total credit exposure - 68.2% or 2.8bn drams (19th position in banking system). Areximbank is on the 4th position by the share of loans to individuals in total lending portfolio - 38.8% or 9.9bn drams. The bank is actively engaged in the market of auto loans (5th position for Q1 2010 despite the 19% decline). The bank invested 11% of its loan portfolio or 2.8bn drams in the given market, which is almost 10% of total auto loans in the banking system of Armenia. In addition, the bank increased mortgage lending 9.4% for Q1 2010 and almost 80% per year. The lowest level of personal loans in total lending portfolio was registered at ProCredit Bank - 8.6% or 1.2bn drams. The bank is specializing in SME finance.
Unlike the previous years, in 2008-2009 and in Q1 2010 personal loans growth rates considerably yielded to the growth rates of lending to the economy because of the financial crisis in 2008-2009 when banks reduced retail lending and activated SME finance (as part of international target credit programs and the Russian stabilization loan received in June 2009 and the WB credits), industrial sector, trade and agriculture finance. Starting the first quarter 2009 only few banks provided retail loans (consumer , mortgage, auto loans) exclusively on refinancing terms. In fact, lending to the individuals slumped for the first three quarter of 2009. Resumption of retail lending started in Q4 2009 mostly thanks to the timely establishment of the National Mortgage Company by the Armenian Central Bank in July 2009. The company refinances mortgage loans and has already formed 3.9bn drams mortgage portfolio by April 1 2010. In addition, the Central Bank launched a project Affordable Housing for Young Families in February 2010. On April 19 2010 the Central Bank and the KfW Bank signed an agreement to continue the Sustainable Housing Finance Market program that was submitted to ratification of the National Assembly. All this steps helped increase lending to the individuals.
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