Tuesday, October 30 2012 16:17

Yield of bank deposits will not fall within the coming years: UBA Executive Director


ArmInfo. The yield of bank deposits in Armenia will not fall within the coming years due to the ongoing appreciation of monetary funds. Executive Director of the Union of Banks of Armenia (UBA) Seyran Sargsyan made such statement in a press conference timed to the World Savings Day, Tuesday. He said that the upcoming pension reforms in the country will not cut the yield either. Commenting on possible decline of the savings market due to the deepening financial and economic crisis in Armenia in the light of the world instability, he said that the current upward trends in the bank savings market in Armenia will be retained for the coming years.

S. Sargsyan said that the interests rates of deposits in terms of the national currency in the market of bank savings is 6%-7% for short-term deposits (up to 6 months) and 12%-13% for year-long deposits. Yield of foreign exchanger deposits is 4%-5% for short-term deposits and nearly 9% for yearlong deposits. He said that mid-term deposits (with a maturity of 6 months -1 year) are popular in the country.

As regards the dynamics of growth of the bank deposits, UBA Executive Director said that bank deposits in the banking system of Armenia grew by over 30% to 1.125 trillion drams mainly due to time deposits. The average deposit totaled 490,000 drams. Sargsyan said that over the last years the Armenian depositors began more actively managing and diversifying their savings. Thus, in the structure of bank deposits the share of foreign exchange deposits is currently 17%, national currency deposits - 18%, with combined deposits making up 65%. Personal foreign exchange deposits totaled 70%, with personal dram deposits totaling 30%. Sargsyan is sure that the pension reform will lead to growth of dram deposits.

Hermine Haroutiunyan, Director of the Deposit Insurance Fund, said in turn that the population confidence in banks began to grow, especially after the maximum guaranteed deposit amount was increased to 4 million drams for AMD deposits (versus previous 2 million drams) and 2 million drams for foreign exchange deposits (versus 1 million drams). She could not say when the next increase in the guaranteed amount will be announced, for it depends on many factors. By data of UBA, the ratio of bank deposits to GDP grew over twofold from the period of 2006 up to 2011 - from 12% to 25.7%. The ratio of private deposits to GDP grew nearly threefold from 5.4% to nearly 15% for the period under review.

By data of the National Statistical Service of Armenia, cash outside the banking system totaled nearly 340 billion drams, which is 28% of total money supply.
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