Friday, September 1 2017 14:01
Karina Melikyan

In Armenian banks loan portfolio, annual decline in the NPL share from 13.2% up to 9.8% due to a significant slowdown in the growth of bad loans

In Armenian banks loan portfolio, annual decline in the NPL share  from 13.2% up to 9.8% due to a significant slowdown in the growth of  bad loans

ArmInfo. In the aggregate loan  portfolio of Armenian banks, the NPL share decreased by July 1, 2017  year on year from 13.2% to 9.8%, reaching 269 billion AMD in absolute  terms. However, five banks, nevertheless, overshoot this indicator  for the maximum limit of the critical limit - 22-33% against the  internationally acceptable 10-15%.

According to the Financial Rating of Armenian Banks, prepared by NA  ArmInfo, the absolute value of overdue loans decreased by 13.3% per  annum, against the growth of 33% a year earlier. Moreover, in  dynamics, along with the currently operating 17 banks, four outgoing  participants from the market are also taken into account, which for  the time being functioned. These are ProCredit Bank, BTA Bank,  Areximbank-GPB Group and Armenian Development Bank, which merged in  2015- 2016 respectively with INECOBANK, Armeconombank, Ardshinbank  and Araratbank. In particular, ProCredit Bank and BTA Bank left the  market at the end of 2015, and Areximbank and the Armenian  Development Bank - at the end of 2016.

In the structure of the NPL, the share of bad loans increased from  47.2% to 58.1% per annum, exceeding 156 billion drams by July 1,  2017. In comparison with the indicator of the year-old, the amount of  bad debt grew only by 6.7%, which is much more modest than the  dynamics of the same period in 2016, when this category of loans  doubled. Only in the first half of the year 2017, the amount of bad  debt increased by 14.3%, slightly losing to the upward trend of the  first half of 2016 - 18.9%.

The bulk of bad loans is concentrated in consumer loans - 19.2%,  trade - 17.6%, industry - 13.5%, agricultural sector - 12.9%, but in  absolute terms this category of loans in these areas decreased by  5-13% % (with a maximum in the industrial sector and a minimum on  consumer loans). A year earlier, the same spheres dominated the bad  loans, but with a higher share: consumer loans - 21.5%, trade -  20.8%, industry - 16.5%, agricultural sector - 15.6%.

The total volume of credit investments of Armenian banks accelerated  annual growth rates to 16.6% from 9.5% a year ago, to 2.8 trillion  AMD, which in turn prompted an upward trend in assets from 6.7% last  year to 19.3% slats in 4.2 trillion. This allowed the income from  lending to accelerate the rate of ascent - from last year's 4% to the  current 7.3%.

As a result, net profit in the banking system of Armenia increased by  49.5% per annum for the first half of the year to 19.2 billion drams,  but quarterly the significant growth of the first trimester was  replaced in the second by a 20% decline, which is most likely due to  write-off of toxic loans From balances and the continuing  accumulation of loans in a hopeless group. (The calculated exchange  rate of the dram as of June 30, 2012 was 480.47 AMD/USD1). 

POST A COMMENT
Input digits     


News
The winners of the 2024 joint program between SIA Armenia and The winners of the 2024 joint program between SIA Armenia and "The Power of One Dram" have been announced
WB, ADB collaborate on housing program for Nagorno-Karabakh IDPsWB, ADB collaborate on housing program for Nagorno-Karabakh IDPs
U.S remains dedicated to building economic resilience of Armenia -  ambassadorU.S remains dedicated to building economic resilience of Armenia -  ambassador
Armenia Deputy PM, World Bank discuss potential for enhancing  cooperationArmenia Deputy PM, World Bank discuss potential for enhancing  cooperation
Armenia`s industrial sector still experiencing double-digit growthArmenia`s industrial sector still experiencing double-digit growth
In January-August, electricity production in Armenia increased by  2.4%In January-August, electricity production in Armenia increased by  2.4%
Fixing over-ambitious and unrealistic goals most dangerous - expert Fixing over-ambitious and unrealistic goals most dangerous - expert 
Concept paper outlining creation of AI ecosystem global network to be  presented at  WCIT2024Concept paper outlining creation of AI ecosystem global network to be  presented at  WCIT2024
WCIT2024 officially launched with a focus on Artificial IntelligenceWCIT2024 officially launched with a focus on Artificial Intelligence
Ardshinbank started making international money transfers via UBPay systemArdshinbank started making international money transfers via UBPay system
Ameriabank - fintech partner of DigiTec2024Ameriabank - fintech partner of DigiTec2024
AraratBank Expands International Transfer Options with Golden Money SystemAraratBank Expands International Transfer Options with Golden Money System
10% idcoin with IDBank Mastercard cards10% idcoin with IDBank Mastercard cards
Armenia expects participation of French companies in implementation  of nuclear and renewable energy projects - PashinyanArmenia expects participation of French companies in implementation  of nuclear and renewable energy projects - Pashinyan
12.5% y/y increase in state budget revenues of Armenia in Jan-Sep  202412.5% y/y increase in state budget revenues of Armenia in Jan-Sep  2024
DigiTec2024 officially launched, with over 200 companies presenting  their innovative solutionsDigiTec2024 officially launched, with over 200 companies presenting  their innovative solutions
ACE interested in cooperating with Armenia in wine-makingACE interested in cooperating with Armenia in wine-making
Annual inflation in Armenia in September amounted to 0.6%Annual inflation in Armenia in September amounted to 0.6%
Armenian startups will have the opportunity to receive investments  from the foundation of the legendary Argentine footballer Lionel  MessiArmenian startups will have the opportunity to receive investments  from the foundation of the legendary Argentine footballer Lionel  Messi
More and more young people in Armenia dreaming of becoming nuclear  engineers More and more young people in Armenia dreaming of becoming nuclear  engineers 
Armenia improves its position in Global Innovation Index -2024Armenia improves its position in Global Innovation Index -2024
Ameriabank’s Special Offer for New Mastercard Holders.  1% Cashback and Lots of GiftsAmeriabank’s Special Offer for New Mastercard Holders. 1% Cashback and Lots of Gifts
Double-digit growth of import prices observed in Armenia`s foreign  tradeDouble-digit growth of import prices observed in Armenia`s foreign  trade
532.5mln transactions worth a total of AMD 9,782.7bln  effected in  Armenia in Jan-Sept 2024532.5mln transactions worth a total of AMD 9,782.7bln  effected in  Armenia in Jan-Sept 2024
We are conservative in making forecasts - ADB We are conservative in making forecasts - ADB 
Armenia takes over chairmanship of coordinating council of CIS  financial supervision bodies Armenia takes over chairmanship of coordinating council of CIS  financial supervision bodies 
Bakhytjan Sagintayev: Since the formation of the EAEU, the Union`s  foreign trade grown by 60%Bakhytjan Sagintayev: Since the formation of the EAEU, the Union`s  foreign trade grown by 60%
Cryptocurrency actively and uncontrollably cashed in ArmeniaCryptocurrency actively and uncontrollably cashed in Armenia
Armenia`s first regional landfill to be completed in HrazdanArmenia`s first regional landfill to be completed in Hrazdan
Mohammad Reza Aref: Iran is ready to play a more serious role in the  EAEUMohammad Reza Aref: Iran is ready to play a more serious role in the  EAEU
Mishustin: It is important to create single transport space, develop  international logistics corridors and establish appropriate  infrastructureMishustin: It is important to create single transport space, develop  international logistics corridors and establish appropriate  infrastructure
EEC to sign joint action plan with Uzbekistan for 2024-2026EEC to sign joint action plan with Uzbekistan for 2024-2026
RA government proposes granting new functions to Military-Industrial  CommitteeRA government proposes granting new functions to Military-Industrial  Committee
Next year `super-ambitious` for Armenia - expertNext year `super-ambitious` for Armenia - expert
EEC head presents Digital Union concept EEC head presents Digital Union concept 
EDB managing director on bank`s role in improved connectivity of  Eurasian nations EDB managing director on bank`s role in improved connectivity of  Eurasian nations 
Concept of trusted data storage central place in philosophy of  Armenia`s digital transformation - premier Concept of trusted data storage central place in philosophy of  Armenia`s digital transformation - premier 
EEC minister, heads of statistical services discuss cooperation EEC minister, heads of statistical services discuss cooperation 
Armenia-Georgia high-voltage line to be ready for operation in four  years - official Armenia-Georgia high-voltage line to be ready for operation in four  years - official 
Armenia could generate more energy for export - official Armenia could generate more energy for export - official 
Idram Junior and Koreez Summarize the Results of the Junius Financial Education CompetitionIdram Junior and Koreez Summarize the Results of the Junius Financial Education Competition
Vardan Janyan: We entering the second copper-bronze ageVardan Janyan: We entering the second copper-bronze age
Vardan Janyan: Despite its significant contribution to economic  development and tax base, Armenia`s mining industry stagnating since  2014-2015Vardan Janyan: Despite its significant contribution to economic  development and tax base, Armenia`s mining industry stagnating since  2014-2015
ZMMK CEO: Transition metals are new gas and oil for countries like  ArmeniaZMMK CEO: Transition metals are new gas and oil for countries like  Armenia
Armenia`s international reserves decreased by 14.6% annually by  September 2024, falling to $3.605 billionArmenia`s international reserves decreased by 14.6% annually by  September 2024, falling to $3.605 billion
The American Competitiveness Exchange (ACE Armenia) program launched  in ArmeniaThe American Competitiveness Exchange (ACE Armenia) program launched  in Armenia
Armenia`s defense budget to be increased 20% next year Armenia`s defense budget to be increased 20% next year 
Iran eases entry of vehicles from Armenia Iran eases entry of vehicles from Armenia 
90% of mutual trade within EAEU in national currencies - Bakhyt  Sultanov90% of mutual trade within EAEU in national currencies - Bakhyt  Sultanov
EEC hopes for formation of common exchange market by 2030EEC hopes for formation of common exchange market by 2030
7.3% increase in Armenia`s agricultural trade with EAEU member-states 7.3% increase in Armenia`s agricultural trade with EAEU member-states 
EAEU ministers of agriculture to meet in Yerevan EAEU ministers of agriculture to meet in Yerevan 
Armenian-Iranian substation Noravan to be completely equipped next yearArmenian-Iranian substation Noravan to be completely equipped next year
USD, EUR transactions up, RUB ones down in in Armenia`s interbank foreign exchange market Sept 23 to 27USD, EUR transactions up, RUB ones down in in Armenia`s interbank foreign exchange market Sept 23 to 27
Tourism development with support of WB discussed in YerevanTourism development with support of WB discussed in Yerevan
The Komitas Museum-Institute, with the support of the MESCS of the Republic of Armenia and Ardshinbank, opened the exhibition The Komitas Museum-Institute, with the support of the MESCS of the Republic of Armenia and Ardshinbank, opened the exhibition "Paris Meetings".
SRC: as of September 27, balance of preferential import of electric vehicles into the territory  of Armenia is 454 unitsSRC: as of September 27, balance of preferential import of electric vehicles into the territory  of Armenia is 454 units
IMF mission head appreciates Armenian authorities` efforts to reduce  cash turnover of financial resourcesIMF mission head appreciates Armenian authorities` efforts to reduce cash turnover of financial resources
Capital development discussed with Amundi-ACBACapital development discussed with Amundi-ACBA
AMD 17.2bln shadow turnover exposed in three months
Read more
Exchange rates
07.10.2024
RUB4.02-0.05
USD386.93-0.06
EUR424.27-2.58
GBP505.41-4.14
CAD284.74-0.80
JPY26.03-0.39
CNY55.13-0.01
CHF451.34-3.03