Yerevan/Mediamax/. The first quarter of 2010 was successful for the banking system, Chairman of the Union of Banks of Armenia (UBA) Ararat Ghukasyan stated today.

Mediamax reports Ararat Ghukasyan as saying that in the first quarter, the banking sector registered growth as to all basic indices. Serious improvement in banks’ portfolios took place. Demand for various credit tools stabilized.

“Assets of the banking system as compared to the previous quarter increased by 5.36% or 72bln AMD, making 1trln 418bln AMD. As compared to the analogous period of last year, the growth in banking system’s assets exceeded 24%. Growth of  credit investments as compared to the previous quarter made 7.42% or 54bln AMD; credit portfolio of the Armenian banking system made 777bln AMD following the results of the first quarter, having increased by 19.44%, as compared to the first quarter of 2009”, Ararat Ghukasyan stated.

According to the data of ACRA Credit Bureau, in the first quarter, Armenian banks provided over 150 thousand credits, the overwhelming part of which represents consumer credits.

According to UBA Chairman, the increase in the total capital of the banking system, as compared to the previous quarter, made 3%, the profit of the banking system in the first quarter made 6.7bln AMD, and the volume of payments to the state budget made 4.4bln AMD.

“Increase in liabilities of the banking system as compared to the previous quarter made 5.35%, and as compared to the first quarter, 2009, the increase of liabilities made 25%. At that, the banks’ liabilities to customers as compared to the analogous period of last year increased by 34.91%”, Ararat Ghukasyan stated.

UBA Chairman noted that simultaneously with the growth of basic indices of the banking system, there is decrease of the share of overdue credits, and if at the end of 2009 the overdue credits made 8-10% of from the total credit portfolio of the system, following the results of the first quarter, this index made 5%.

According to Ghukasyan, the number of court proceedings between banks and customers as compared to the number of all credit deals, does not exceed 1% in the entire system. “Tendency for reduction in the number of judicial proceedings is also observed: the majority of suits are recalled as a result of reaching mutual agreements between the bank and the customer” UBA Chairman stated.

He noted that banking interest rates in Armenia in the first quarter on average decreased by two percentage points. “The average interest rate of consumer credits makes 20% annually, 16% for business credits, and the interest rates on mortgage credits on average make 14%”, Ararat Ghukasyan stated.

He noted that increase of the refinancing rate by the Central Bank (CB) of Armenia will have its influence on the percentage policy of the banks gradually, and the results of toughening of monetary-credit policy will be seen later on. At that, UBA Chairman expressed an opinion that the refinancing rate of 7.25%, set by the Central Bank a few days ago, “is close to maximum, and, most likely, it will be preserved till the end of the year”.