Friday, August 26 2022 22:35
Alina Hovhannisyan

UBA: After 2020-2021, the Armenian banking system has not yet managed  to restore lending growth

UBA: After 2020-2021, the Armenian banking system has not yet managed  to restore lending growth

ArmInfo.After 2020-2021, the Armenian banking system has not yet managed to restore lending growth. Executive Director of the Union of Banks of Armenia (UBA)  Seyran Sargsyan stated this during a press conference on August 26.

In this vein, he said that in the first half of the year, credit  investments increased by 28 billion drams alone or 0.7%, reaching  3.996 trillion drams, slightly lower that the volume recorded in  2020.

At the same time, Sargsyan noted that not all sectors of the economy  managed to register growth. In particular, he said that agricultural  lending increased over the reporting period by 1.6%  alone- to 215.5  billion drams (with a 6% share in the total loan portfolio), the  construction sector - by 4.2% to 328.3 billion drams (or 9% in the  loan portfolio), the financial sector - by 13.5% to 237.3 billion  drams (or 7% in the loan portfolio). At the same time, lending to the  service sector decreased by 8.9% to 260.6 billion drams (or 7% in the  loan portfolio), industry - by 2.2% to 510.7 billion drams (or 14% in  the loan portfolio), trade - by 2 % to 472.1 billion drams (or 13% in  the loan portfolio), transport and communications - by 20.3% to 98.7  billion drams (or 3% in the loan portfolio).

Answering the question of an ArmInfo correspondent regarding the  decline in corporate lending with the growth of the sectors mentioned  as part of GDP, he conditioned this by the problems of the  implemented projects, the circumstances prevailing in this or that  sector of the economy. At the same time, he noted that at this stage,  in the current situation, there is no deterioration in the quality of  the loan portfolio of the banking system. "But what will happen next  is hard to say," he said.

The head of the UBA said that consumer loans accounted for 23% or  828.1 billion drams, with an increase of 0.4%, while mortgage lending  increased by 10.3% to 721.9 billion drams.  Sargsyan stressed that,  thus, the share of lending to the economy accounted for 44.4% (1.828  trillion drams), individuals - 44.2% (1.818 trillion), and the  remaining 11.4% are interbank loans (466 billion drams).

He drew attention to the fact that the AMD component in the loan  portfolio reached 60% by July 1, 2022 and, accordingly, the foreign  exchange component decreased to 40%, while at the beginning of the  year, foreign currency loans prevailed over AMD loans - 50.3% against  49.7%.  The interest rates of AMD loans increased by 1.4 percentage  points over the half year, and by 0.8 percentage points in y-o-y  terms, amounting to 13.6%, while the rates on dollar loans increased  by 0.2% over the half year, with a y-o-y increase of 0.1%, amounting  to 8.6%.

Sargsyan noted that there should have been an increase in interest  rates against the background of inflationary pressure and refinancing  rate increase in Armenia, but no noticeable changes were observed.   And answering the question of an ArmInfo correspondent, he explained:  "This is due to the fact that the funds that were attracted at the  previously existing rates make it possible to carry out lending at  the current rates in the banking system."

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