By the end of this year mortgage credit portfolio of Armenia’s banking
system will amount to $300mln: Head of KfW Office in Yerevan

2008-11-08 15:39:00

ArmInfo. By the end of this year mortgage credit portfolio of Armenia’s
banking system will amount to $300mln, says the head of the KfW Office
in Yerevan Karapet Gevorgyan.

At the end of Sept the mortgage credit portfolio of the system totalled
$278mln (84bln AMD) – twice as much as a year before.

The terms of mortgage crediting are being toughened in the face of the
global financial crisis. Today, it is impossible to make forecasts on
long-term credit rates. If the crisis is overcome, the rates may drop
and the borrowers of 10-15-year mortgage credits may want to refinance
their money into other credits. As a result, the banks may lose both
clients and profits. The drop in the credit rates may lead to early
repayments, excessive liquidity and losses.

To note, today all Armenian banks issue mortgage loans. In the third
quarter of 2008 mortgage crediting declined: banks began showing
prudence in issuing long-term loans and seriously toughened domestic
risk system. The global financial crisis has made banks more careful in
their credit policies and has urged them to accumulate liquidity.