CBA CHAIRMAN: GREAT CHANGES IN MORTGAGE MARKET ARE POSSIBLE ONLY IN 2008

Noyan Tapan
Feb 05 2007

YEREVAN, FEBRUARY 5, NOYAN TAPAN. The Central Bank of Armenia (CBA) in
cooperation with KfW Bank (Germany) and the Association of Professional
Participants of Mortgage Market of Armenia have approved the mortgage
crediting standards. Chairman of the CBA Tigran Sargsian stated this
at the February 5 press conference.

According to him, the German-Armenian Fund of the CBA and KfW Bank
can already finance the selected 5 commercial banks and 2 credit
orgaizations with the aim of providing mortgage credits in line with
these standards.

T. Sargsian expressed the opinion that in case of successful
functioning of the standard mortgage credit provision mechanism "it
will be possible to place the German-Armenian Fund’s resources of up
to 12 mln euros, as well as own resources of commercial banks." HSBC
Armenia Bank is expected to sharply increase mortgage crediting
in 2007.

"All this will allow to carry out securitization of standard mortgage
credits in 2008, as a result of which commercial banks will receive
refinancing resources. We can consider this moment as a turning point
in development of the mortgage market," CBA Chairman stated.

It was noted that although mortgage crediting increased twofold in
2006, no considerable changes were registered in the sector. This
growth is conditioned by the small size of base indices (in 2006,
mortgage credits of 23 bln 770 mln 50 thousand drams (57 mln 134
thousand USD) were provided in Armenia against credits of 11 bln 105
mln 554 thousand drams in 2005), while the number of credits was small.