Informational coverage of ACRA credit bureau reached 88.1% of the  working population in Armenia by July

ArmInfo.  In Armenia, the  database of the ACRA credit bureau by July 2020 was replenished with  data on the number of loans up to 21.548 million and borrowers up to  1.726 million. This is evidenced by the graphical report "Dynamics of  the main indicators of the credit bureau" presented on the ACRA  website.

According to the source, for the Q2 of this year an increase in the  number of loans by 464.132 thousand was accompanied by an increase in  borrowers by 3.599 thousand, and in the first half of the year the  growth of these indicators amounted to 885.018 thousand and 6.939  thousand, respectively.

Thus, ACRA's information coverage reached 88.1% of the working  population in May 2020, having remained at this level in June,  against 87.8% in January and 88% held in February-April.

It should be noted that the share of requests to the Bureau in loans  granted increasing moderately in the Q1 from 439.8% to 476.7%, jumped  to 797.8% in April, after which it also sharply declined - to 475.2%  in May and 456.9% in June. This means that most loan requests were  made in April, when in the first month of emergency due to the  coronavirus pandemic, entities faced social and economic hardships as  a result of a temporary ban on many activities. However, if in April  one loan out of 8 requests was satisfied, then in May and June this  ratio decreased to 5/1.

According to the Financial Rating of Banks of Armenia prepared by  ArmInfo IC as of June 30, 2020, the total loan portfolio of banks  exceeded AMD 4 trillion ($ 8.3 million), with an acceleration of  y-o-y growth from 11% to 19%, with a strongly weakened quarterly  growth. At the same time, the growth of non- performing loans resumed  and the share of NPL in the loan portfolio shifted in Q2 from 8% to  8.3% (taking into account bad loans, which the Central Bank does not  take into account due to writing them off balance).  An 8.2% y-o-y  growth in overdue loans (with a 10.1% quarterly growth), in turn, did  not allow profits to accelerate growth rates: net profit, amounting  to 40.6 billion drams ($ 84.2 million) in H1, increased by 6% per  annum, similar to the rate of a year ago.

It should be noted that according to the head of the Central Bank of  the Republic of Armenia Martin Galstyan, due to three-month loan  payment holidays, the Armenian banking system did not receive 100  billion drams in repayment on loans. It is predicted that the share  of non-perfoprming loans (NPL) may soon exceed 10%. He explained  that, according to the Central Bank's estimates, the growth of NPL in  the total loan portfolio of the banking system is expected due to the  introduction of credit holidays, as well as a decrease in citizens'  incomes due to the epidemic crisis.

To recall, in Armenia since March 16, within the framework of the  fight against the spread of coronavirus, a State of Emergency was  introduced, which was renewed monthly and was withdrawn from  September 12 with maintaining the restrictive measures. But the banks  of Armenia, on the eve of the emergency, starting from March 13,  announced the introduction of a credit vacation with an attendant  deferral of payments and an extension of maturity. In March-May,  almost 550 thousand individuals and 17.4 thousand legal entities, or  about 30% of bank customers, took advantage of the opportunity for a  credit vacation or revision of credit agreements. In total, about 980  thousand loan agreements were renegotiated for a total residual  amount of 1.3 trillion drams, and the volume of deferred payments   amounted to 100 billion drams.