Yerevan/Mediamax/. Even if 30% of the Armenian banking system’s credits are classified as “bad”, not a single bank will have problems with solvency, Head of Financial System Stability and Development Department of the Central Bank (CB) of Armenia Vahe Vardanyan said in Yerevan today.

Mediamax reports that, speaking at a news conference in Yerevan today, Vahe Vardanyan stated that every month the CB elaborates stress scenarios for the banking system to be sure of its stability.

“Even given the most pessimistic scenario, if 30% of the aggregate credit portfolio is classified as “bad”, the system may  absorb all risks and none of the banks will have problems with solvency”, CB representative said.

According to Vahe Vardanyan, the Armenian banking system continues remaining stable and highly capitalized. “The index of capital adequacy as of the end of the year made 22.2%. Liquidity of the banks exceeds twofold the required norms, but banks keep liquidity at such a high level because of lack of long money”, Vahe Vardanyan said.  

He noted that as a result of 26.3% growth of the aggregate credit portfolio of the Armenian banking system in 2010, the correlation of credits to GDP made 25.3% and the level of financial mediation (correlations of the financial system’s assets to the GDP) makes now 44.5% (growth by 2.6 percentage points), which is significantly lower, than the analogous indices of other eastern European countries.

CB representative informed that given preservation of the current development speeds, in the nearest future the financial system of Armenia will enter the pre-crisis level of profitability.