ArmInfo. During the coronavirus pandemic, the banking system of Armenia provided loan holidays to 550 thousand individuals and about 17 thousand legal entities, as a result of which loan obligations in the amount of 1.3 trillion drams were postponed. Chairman of the Central Bank of the Republic of Armenia Martin Galstyan said this on September 8 during a press conference, noting that due to the three-month credit holidays, the banking system did not receive 100 billion drams in the form of loan repayments.
<Can banks make spending all the time without waiting for revenue streams? We cannot compromise the stability of the system. If this process continues, we will face problems, "M. Galstyan said, noting that the banking system would not be able to resist these problems alone.
To note, in Armenia since March 16, as part of the fight against the spread of coronavirus, a state of emergency was introduced, which was extended monthly and will be lifted from September 12, while maintaining restrictive measures. But the banks of Armenia, on the eve of the emergency, already from March 13, announced the introduction of credit holidays with an accompanying extension of maturity.
According to the Financial Rating of Banks of Armenia as of June 30, 2020, prepared by ArmInfo IC, the total loan portfolio of banks exceeded 4 trillion drams ($ 8.3 million), and assets reached 6 trillion drams ($ 12.4 million). Moreover, the acceleration of the y-o-y growth of loans from 11% to 19% was accompanied by a slowdown in the growth of assets from 17% to 14%, with a strongly weakened quarterly growth in both cases. At the same time, the growth of non-performing loans resumed and the share of NPL in the loan portfolio changed in the Q2 from 8% to 8.3%, and in assets from 5.2% to 6.3% (taking into account bad loans, which the Central Bank does not take into account from - for writing off to the off-balance sheet). The 8.2% growth in overdue loans (with a 10.1% quarterly growth), in turn, did not allow profit to accelerate growth rates: net profit, amounting to AMD 40.6 billion ($ 84.2 million) in the first half of the year, increased by 6 % per annum similar to the rate of a year ago.
Not only consumer loans, but also sectoral portfolios (trade, catering / services, agricultural and industrial sectors) were highly toxic (dominated by doubtful and bad loans). And this was accompanied by a decline in the value of healthy (standard) loans for the reporting quarter by 0.5% (from 5.1% growth in the Q1), with a y-o-y growth of 15.3%, presumably to a greater extent secured due to renegotiation of contracts during credit holidays (from March 13 to June) and active participation in the 1st and 2nd anti-crisis state programs.
