Wednesday, November 13 2013 14:50

Overdue loans grew by 26,1% because of worsening of the non-standard and doubtful groups in the credit portfolio of the credit companies of Armenia

Arminfo. The share of the financial sector, agriculture and trade crediting is big in the total credit portfolio of Armenian credit companies is big. However, the scientific sector provides the biggest growth. So, the volume of the financial sector crediting for the 3Q 2013 grew by 8,1%, and 22,2% versus 3Q 2012 and amounted to 52.3 bln drams ($129 mln). Agriculture crediting for the 3Q 2013 dropped by 2,1% to 35.3 bln drams ($87 mln), which is by 35,2% versus the 3Q 2012. The volume of the trade sector crediting has changed a little - 20.9 bln drams ($51.7 mln), by 12,4% more versus the 3Q 2012. The crediting of the scientific sector grew by 77,4%, twofold growth and amounted to 293 mln drams ($725 thsd).

According to the data of Armenia's Central Bank, standard credits in the credit portfolio of Armenian credit companies grew by 24,3% versus 3Q 2012 and the overdue credits grew by 26,1%. Standard credits grew by 3,2% for the 3Q 2013 versus the 2Q and overdue credits fell by 4%.

The total volume of credit investments of Armenian credit companies for the 3Q 2013 grew by 3,1% and amounted to 181.2 bln drams ($447.2 mln), which is by 25,5% versus the 3Q 2012. The volume of the mortgage credits in its structure amounted to - 18.9 bln drams ($46.8 mln), by 7,5% more versus 2Q and by 15% more versus the 3Q 2012. The volume of the consumer credits amounted to 17.3 bln drams ($42.6 mln), by 4,7% more versus 2Q and by 36,4% more versus the 3Q 2012.

The sixth is the processing industry, in which credit companies placed credits in a volume 9.8 bln drams ($24 mln), by 3.1% less versus the 2Q and by 22% more versus the 3Q 2012, The building sector is the seventh by the volume of credits - 5.6 bln drams ($13.8 mln), by 7,5% less versus 2Q and by 1,8% less versus the 3Q 2012. The eighth is the energy sector - 4.5 bln drams credits ($11 mln), by 1,5% more versus 2Q and by 15,6% more versus the 3Q 2012. The mining industry is the ninth with a crediting volume 3.6 bln drams ($8.8 mln), by 10 times more versus the 3Q 2012, but by 2,3% less versus 2Q.

The credits and receivables classified by the risk groups for the 3Q 2013 grew by 2,9%, and by 24,3% versus 3Q 2012 and amounted to 182.9 bln drams. As of 1 October 2013, the share of the "standard" credits in the credit portfolio of credit companies was 95,8% or 175.3 bln drams; of the "controlled" - 2,2% or 3.9 bln drams, of the "non-standard" ones - 1,1% or 2.1 bln drams; of the "doubtful" ones - 0,9% or 1.6 bln drams. Over the reported period in the structure of the overdue credits falling was fixed only in the "controlled" group - by 13,3%, while the "non-standard" and "doubtful" groups grew by 10,5% and 6,7% respectively. These three groups showed growth versus the 3Q 2012: "controlled " - by 8,3%, "non-standard" - by 75% and "doubtful"- by 33,3%.

By the CBA's data, as of 1 Oct 2013, there were 33 credit companies and 123 branches in Armenia (versus 32 credit companies and 90 branches over the same period of 2012). In February 2013 Credo Finance UCO entered the market. As a result, there are 29 UCOs, 3 leasing companies and 1 credit union in Armenia. 4 of the UCOs specialize in mortgage lending: First Mortgage Company, Fides Mortgage Company, and the state-owned National Mortgage Company and Affordable Housing for Young Families. National Mortgage Company and Affordable Housing for Young Families, which are refinancing mortgage loans, retain leading positions by their loan books among the Top 5 credit companies.

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Overdue loans grew by 26,1% because of worsening of the non-standard and doubtful groups in the credit portfolio of the credit companies of Armenia