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EMIL SOGHOMONIAN: IF A SECOND STAGE OF THE CRISIS BEGINS IN THE WORLD ECONOMY, ARMENIAN BANKING SYSTEM WILL NOT BE SHATTERED
NOYAN TAPAN - ARMENIANS TODAY
August 26, 2009
Yerevan
YEREVAN, AUGUST 26, NOYAN TAPAN. The Armenian banking system will
end this year by making a profit, Chairman of the Union of Armenian
Banks, Chairman of Prometey Bank's Board Emil Soghomonian expressed
an opinion. According to him, the March 3 sharp depreciation of the
Armenian dram (by almost 20%) will not happen again and there will be
no sharp fluctuations of the dram's exchange rate because the measures
being taken by the government and the Central Bank of Armenia (CBA)
are aimed at ruling out that. He forecast that the recession will
make about 10% in Armenia, while next year this decline will stop
and a zero percent growth will be recorded.
At the same time, at the August 25 press conference E. Soghomonian
announced that the nonrepayment of credits currently amounts to 5-6%
in Armenia as compared to 1% in 2008. He added that an index of 5-6%
is quite high for a country like Armenia with an overall capital of
30-40 million USD.
In his words, in the first half of 2009 the banks made a profit of 4
billion 300 million drams, which was lower than last year's index. 16
out of the 22 banks made a profit, while 6 banks suffered losses. In
the opinion of E.
Soghomonian, the major cause of losses was the return to a floating
exchange rate on March 3.
E. Soghomonian expressed conviction that if a second stage of the
crisis begins in the world economy, the Armenian banking system will
not be shattered.
In response to the question about why the government and CBA allocate
the financial resources attracted from outside to the banking sector
as well, in case of the banks' being so stable, E. Soghomonian replied
that they are behaving correctly. "In other countries, governments
also provide financial assistance to banks, feed the banking systems
to avoid worse situations. Our purpose is to develop small and medium
business," he underlined. According to him, the interest rates of
credits are not so high in Armenia as in conditions of a crisis,
the risks increase and the interest rates rise.
The chairman of the Union of Armenian Banks told the reporters about
his concern. In his words, the Armenians have become dollar sellers:
many people get into a panic and start exchanging their drams for
dollars, while later they suffer losses when selling these dollars,
even though they initially intended to make a profit. "If this
mentality does not change, negative developments are not ruled out,"
E. Soghomonian said.
NOYAN TAPAN - ARMENIANS TODAY
August 26, 2009
Yerevan
YEREVAN, AUGUST 26, NOYAN TAPAN. The Armenian banking system will
end this year by making a profit, Chairman of the Union of Armenian
Banks, Chairman of Prometey Bank's Board Emil Soghomonian expressed
an opinion. According to him, the March 3 sharp depreciation of the
Armenian dram (by almost 20%) will not happen again and there will be
no sharp fluctuations of the dram's exchange rate because the measures
being taken by the government and the Central Bank of Armenia (CBA)
are aimed at ruling out that. He forecast that the recession will
make about 10% in Armenia, while next year this decline will stop
and a zero percent growth will be recorded.
At the same time, at the August 25 press conference E. Soghomonian
announced that the nonrepayment of credits currently amounts to 5-6%
in Armenia as compared to 1% in 2008. He added that an index of 5-6%
is quite high for a country like Armenia with an overall capital of
30-40 million USD.
In his words, in the first half of 2009 the banks made a profit of 4
billion 300 million drams, which was lower than last year's index. 16
out of the 22 banks made a profit, while 6 banks suffered losses. In
the opinion of E.
Soghomonian, the major cause of losses was the return to a floating
exchange rate on March 3.
E. Soghomonian expressed conviction that if a second stage of the
crisis begins in the world economy, the Armenian banking system will
not be shattered.
In response to the question about why the government and CBA allocate
the financial resources attracted from outside to the banking sector
as well, in case of the banks' being so stable, E. Soghomonian replied
that they are behaving correctly. "In other countries, governments
also provide financial assistance to banks, feed the banking systems
to avoid worse situations. Our purpose is to develop small and medium
business," he underlined. According to him, the interest rates of
credits are not so high in Armenia as in conditions of a crisis,
the risks increase and the interest rates rise.
The chairman of the Union of Armenian Banks told the reporters about
his concern. In his words, the Armenians have become dollar sellers:
many people get into a panic and start exchanging their drams for
dollars, while later they suffer losses when selling these dollars,
even though they initially intended to make a profit. "If this
mentality does not change, negative developments are not ruled out,"
E. Soghomonian said.