Seyran Sargsyan: In the post-coronavirus period, the banking system  will face a significant increase in non- performing loans - but the  limit will be acceptable and quite manageable

ArmInfo. The current situation with coronavirus affected the income of individuals and legal entities, which, of course, could not but affect the lending process.  In response to a question from ArmInfo, this during an online press  conference on May 26, said Executive Director of the Union of Banks  of Armenia (UBA) Seyran Sargsyan.

"Naturally, banks are now unable to lend in the same volumes that  were before the situation with the coronavirus. The financing process  will continue, but the deterioration in the solvency of customers  will affect the volume of lending," he explained.

At the same time, Sargsyan drew attention to the fact that after the  credit holidays that the banks provided to individuals and legal  entities during the State of Emergency, some customers will encounter  difficulties in repaying loan obligations. "Naturally, this will not  have the best effect on the volume of non-performing loans. I note  that before coronavirus, the share of non-performing loans in the  loan portfolio of the banking system of Armenia was 4-5% (excluding  bad loans - Ed.), And historically has always been lower than in  other countries "Even if this indicator increases significantly, it  will still be within acceptable limits and quite manageable in  comparison with other countries. And this is one of the main impacts  that we will face in the post-coronavirus period," S. Sargsyan  emphasized.

Note, in anticipation of the introduction of state of emergency in  Armenia from March 16, the Armenian since March 13, banks announced a  2-3 month loan vacation for individuals and legal entities implying a  deferred payment on interest payments and the principal amount of the  loan. Moreover, the delayed payments will be transferred to the  following months. According to experts, this increases the monthly  repayment burden, which makes it difficult for a borrower who is in a  difficult situation due to the coronavirus pandemic and restrictive  measures taken in connection with this, to make it difficult to  fulfill loan obligations.