Armenian Banks closing the year with profit

In the banking area legislative improvements are expected. As Emil Soghomonyan the president of the Union of Banks of Armenia informed during the press conference the legislative proposals from the banks the Union has summed up and presented to the RA Government. He mentioned the legislative changes in the value added taxes, the taxing of the non residents, and the pledging of moveable estate, etc.

E. Soghomonyan agreed that the banks have difficulty in providing credits to the newly starting businesses: “We have a lot of cases when, especially in the past , the banks were providing credits with in cash and the future control was becoming impossible and it was turning out that they had got a car by the credit. At present if the banks are being sure least for 90% that it is a newly starting business at they provide a credit.”

Coming up to the credit percentage the president of the Union of Banks assured that the percents are not that much high. According to him because of the crises conditions the risks were to grow and not the percents.

If included for 14 %, the cost price is 2%. So it is 16 %. At best 2% margin must be used, i.e. credit must be provided with 18 %. 18 % will have normal business credits and the more risky fields, consumers’ one, for hypothec credits will have higher percents”,-said E. Soghomonyan.

As to him, in Armenia the process of not paying back the credits comprises 5-6% this year. Last year it was 1%. As to E. Soghomonyan 5-6 % is a big amount if the general capital is 30-40 million.

“In the first half of this year the banks registered profit of 4 billion 300 million (nearly 12 million drams). As compared with the last year, this number is very low. 28 billion annual profit, 14 billion for six months. 16 banks out of 22 recorded profits, 6 had losses. The reason for losses was the omission of the currency exchange rate on 3 March”,-mentioned E. Soghomonyan, excluding that the banks will have losses by the end of the year.

He ensured that if there is the second phase of the crisis, the Armenian “banking system will not suffer”.

E. Soghomonyan predicted a 10 % decrease in the economic situation of RA. As to him, next year there will not be any decrease and the increase will comprise 0%.