Monday, June 3 2013 21:53
CB: Financial system of Armenia ready to withstand any shocks
ArmInfo. Financial system of Armenia is ready to withstand any shocks from the domestic economy and from the outside, Andranik Grigoryan, Head of the Department for Stability and Development of the Banking System, Central Bank of Armenia, told media, overnight.
He said that uncertainty on the world markets is what foremost affects the financial system of the country. As an exporter country Armenia must assign a high priority to volatility on the world Commodity Exchange.
As regards the risks emerging from the domestic economy, their influence is more predictable, he said. "The 7.2% economic growth and 3.2% inflation in 2012 met the Central Bank's target. Therefore, financial organizations got an opportunity to develop specific risk management policy," he said. In fact, the share of non- performing loans in the total loan portfolios of banks was just 3.5% with a 0.1pp growth over the year, while in the world practice even 10% is a normal indicator, Grigoryan explained. Stability of the financial system of Armenia greatly depends also on the activity of financial organizations that has intensified over the last 5 years. Total loan portfolio of the banking system has been growing 30% in average over the last 5 years, with the level of financial mediation growing 35%. The ratio of the assets of the financial system to GDP totaled nearly 67%, amid 38% loans to GDP ratio. Comparing to older indicators, this is a real achievement for Armenia, he said.
The banking system of Armenia encompasses 22 banks (inclusive of PanArmenian Bank). There are also 33 credit companies (including 3 leasing companies and accredit union) and 6 insurance companies.
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