by Elita Babayan
Armenian banks observe some deterioration in loan books. Gevorg Tarumyan, Deputy General Director, CFO at Ameriabank, said at today's press conference that in Q1 2014 a number of large Armenian banks increased their administrative expenses due to the contributions to the pension fund. A few banks considerably increased loan loss provisions. As a result, in Q1 2014 the profit of the Armenian banking system dropped by almost 1/3 and totaled 9 bln AMD.
Tarumyan specified that the growth in some banks' loan loss provisions is due to some deterioration in the loan books. "The latter is explained by both the general economic situation and the deterioration of the condition of some big borrowers", he said. Tarumyan added that the banks should enhance the degree of diversification both for economy sectors and borrowers. In addition, the formation of reserves should be carried out gradually.
Tarumyan thinks that the banks themselves should stimulate economic growth. "They should offer new products to the borrowers and regularly revise and facilitate the lending terms", he said. Tarumyan is convinced that much depends on the situation in the strategic partner countries of Armenia. "We are not a closed economy and therefore we cannot stay out of foreign crises", he said.