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Fitch Ratings Analyst: High Capitalization Of Most Armenian Banks Wi

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  • Fitch Ratings Analyst: High Capitalization Of Most Armenian Banks Wi

    FITCH RATINGS ANALYST: HIGH CAPITALIZATION OF MOST ARMENIAN BANKS WILL HELP ABSORBING LOSSES IN CASE OF WORSENING ASSET QUALITY

    ArmInfo
    2009-09-16 19:25:00

    ArmInfo. High capitalization of most Armenian banks will help them
    absorbing losses in case of worsening asset quality, Fitch Ratings
    Agency's Analyst on CIS Financial Organizations Nelli Badalian told
    ArmInfo.

    She said that the global financial and economic crisis has
    predetermined development of Armenian banks since late 2008. During
    2009 the country experienced sharp devaluation of the national
    dram that has led to increase of foreign currency deposits, she
    said. Economic decline and devaluation have negatively affected the
    quality of bank assets and the share of defaulted loans has grown to
    10% of total portfolio since early 2009 and has not changed over the
    last two months. Given the significant economic decline, such share
    of defaulted loans is moderate though further growth of default is
    not ruled out either, she said.

    N. Badallian said the share of foreign market funding in Armenian
    banks is not high. Bank did not issued euro bonds, almost did not
    attract funds through syndicated loans. Funds were provided either by
    international financial institutions or parent banks since possible
    extension of terms is easier with them, she said.

    Armenian national dram sharply devaluated on March 3 2009. GDP fell
    16.3% for Jan-Jul 2009 and reached 18.5% in late July.

    From: Emil Lazarian | Ararat NewsPress
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