Thursday, March 26 2015 10:46

 In 2015 VTB Armenia is to have mortgage portfolio growth of 10-20% or 3 billion AMD, said Head of VTB Armenia Retail department Artak Khachatryan at a press conference on March 25. 

According to him, the increase is expected for all mortgage loan types - repair, flat acquisition in a new building, construction of private houses. "VTB Armenia is already participating in the government project on project on tax indemnity to the customers who have real estate loans. As a result of this decision both the bank and the whole Armenian banking system are expecting a mortgage portfolio growth of 10-20%.  But for now these are just expert evaluations", said Khachatryan. 

VTB CEO Yury Gusev said that the enactment is to have a positive impact on not the country's banking system only, but is to provide Armenian construction firms with extra money flow. 

To note, under the renovated Law On Income Tax that came into effect on Jan 1 2015, compensations will be paid to mortgage borrowers based on the credit percentage. Under the new law, the compensation will apply to mortgage credits consummated after Nov 1 2014 if the apartment is bought directly from the real estate developer or a private house is being built. This tax concession is in force all over the Armenian Republic. The given privileges will cover all hired employees, private entrepreneurs or notaries.  The compensations will be paid to hired employees once a quarter, while private entrepreneurs and notaries could claim it once a year. 

According to the Financial Rating of Armenian Banks prepared by ArmInfo, the mortgage portfolio of the Armenian banks totaled 173.7 bln drams ($365.7 mln) as of Jan 1 2015 or 8% of total loans, with a 22.1% year over year growth and 12.1% growth for Q4.  For comparison, in 2007 this indicator grew over twofold. In 2008, the growth rates slackened and made up 54.5%. In 2009 this indicator totaled 4.9%, in 2010 the growth accelerated to 6.4%, in 2011 - 22%, and again slackened in 2012 to 15% and in 2013 to 12%. VTB Bank Armenia is among top three banks in terms of mortgage loans. All the banks provide mortgage loans. Banks experts forecast a 10%-20% growth of mortgage loans in 2015 due to the Government's decision to refund the income tax of mortgage borrowers. The decision will boost also the housing construction, experts say.