ArmInfo.The level of non-performing loans (NPL) increased by 14% over year in the banking system of Armenia. This is evidenced by the data of the ''Financial ratings of commercial banks of Armenia'' analytical report prepared by the Agency of Rating Marketing Information (ArmInfo) at the end of the first half of 2018.
According to the analytical report, in absolute terms, the amount of overdue loans increased from 268.8 billion drams (as of June 30, 2017) to 306.5 billion (as of June 30, 2018). The ratio of banks 'credit investments, which characterizes the share of overdue loans in the banks' loan portfolio, increased on average from 9.79% to 10.08%. As a result, the reserves for possible losses increased from 4.05% to 6.16%.
The best indicator of the delay in the loan portfolio was recorded by Armbusinessbank (ABB) (1.9%), the worst in Unibank (42.21%).
According to analysts of the AmRating rating agency, the level of overdue loans in the banking system as a whole meets international standards (max 15%) and does not give cause for concern. At the same time, growth of NPL of some banks was quite predictable due to the substantial and even excessive liquidity that was recorded after the process of consolidation of the country's banking system, which threatens to reduce the level of profitability, and, as a result, significant activation of credit policy in 2017 - 2018.
According to analysts, the further trend of this indicator will largely depend on the competent development of the country's economic, including tax policy by the new authorities, from the point of view of increasing the efficiency of the business environment and increasing the solvency of economic agents, as well as the accessibility of economic entities to inexpensive loan capital.