The state initiative on amnesty of bad loans fines did not prevent  increase of overdue loans 

ArmInfo. The government's initiative to amnesty the fines / penalties of bad loans with  concomitant refinancing, the implementation of which the banks have  started without delay since July this year, did not lead to reduction  in overdue loans.

Presumably, one of the main reasons for the upward  dynamics of the NPL portfolio was the mining industry, the problems  in which, due to the stringent environmental requirements, had  negative impact on the quality of banks' loan portfolios, since  relatively large loans were usually provided to this area. This  opinion was expressed by Karina Melikyan, an analyst at AmRating  national rating agency.

Thus according to the Financial Rating of Banks of Armenia, prepared  by ArmInfo, by 1 October 2018 the volume of overdue loans in  Armenia's banks increased by 31.4% per annum, while a year earlier in  the same period a decrease of 5.2% was recorded. Due to the rising  dynamics of overdue loans, the share of NPL in the loan portfolio  increased by 1 October 2018 to 11.2% from last year's 10.2%. In the  loan portfolio of 3.1 trillion drams ($ 6.4 billion, with a y-o-y  growth of 17%), overdue loans accounted for 354.5 billion drams ($  734.3 million), of which 39% are in the doubtful group, 35% are  hopeless, and the proportion of controlled and non-standard groups is  13% each. A year earlier, in the structure of overdue loans, the  lion's share fell on a hopeless group - 59.4%, and the proportion of  the doubtful group was much more modest - 12.7%, while the other less  risky loans were: controlled - 17.9% and non-standard - 10 %.

The y-o-y growth in overdue loans was caused by a sharp increase in a  doubtful group of loans 4-fold and non-standard almost 2-fold, with a  very modest decline in bad and controlled loans - by 24.2% and 3.2%,  respectively. Against this background, standard loans grew in y-o-y  terms 16.7%. To note for comparison, that a year earlier bad loans  showed an increase of 15.7%, while the other less risky groups were  in decline:  doubtful - by 44.8%, non-standard - by 22.1%, controlled  - by 5 , 3%, while standard loans showed an increase of 14.3%.

Consumer loans - 25.8% occupy the major share in bad loans, the  retail sector - 16.4%, the agricultural sector - 12.7% and industry -  8.7%. In the total volume of overdue loans, these areas also  dominate:  consumer loans - 25%, trade - 14%, agricultural sector -  13.4% and industry - 12.2%.