Profitability

All Belarusian banks are universal, i.e., they can make profit on rendering services to their clients and on conducting investment operations. The major part of income of the Belarusian banks is comprised of credit services. As of April 1, 2008 the amount of credits rendered to clients was BYR 33.5 trillion – 72.1% of all Belarusian banks’ assets. Another 9% was comprised of bank credits to other banks.

Net interest profit in the first quarter of 2008 made up almost a half – 49% of net profit received by the Belarusian income as interests, service fees and currency exchange profits. The shares of the last two types of profits were 35% and 16%, accordingly. The profits from investments in general in the banking system, in particular, are insignificant, and for some banks they were negative, since investments are mostly made into securities and bonds of the National Bank that are used for liquidity support operations rather than for gaining profits from investments.

In the majority of large banks that make the top ten banks with the highest amount of assets, the largest part of net profits were made of interest profits, while service fees make the largest portion of profits of only two of them – BPS-Bank and Moscow-Minsk Bank. However, the amount of net interest profits was usually lower than the amount of currency exchange and service fee profits.

Thus, we may conclude that the largest Belarusian banks are not distinguished by the types of activity and their profits are rather balanced in nature. However, there are some financial institutions among small and medium banks, whose activities may be considered as highly specialized.

The net service fee and currency exchange profits of several banks is considerably, or rather, by several times excheeds the value of net interest profits. These are banks with a prevailing share of service fee profits: the International Trade and Investments Bank, Trustbank, the Reconversion and Development Bank, the Belarusian Industrial Bank, Absolutbank, Sombelbank.

Another group of specialized banks consists of banks, an essential part of net profit of which consists of currency exchange operations. These are Technobank, BelSwissbank, Golden Taler, International Reserves Bank.

The Belarusian banking system as a whole grows rather fast, virtually doubling with every year. In 2006 it grew by 91.3% and amounted to BYR 411.2 bln and to BYR 602.1 bln in 2007. However, in 2007 and according to the outcomes of the first six months of 2008, all active Belarusian banks gained profits, and in many banks it was higher than the inflation rate and deposit fees. This makes investments into the national banking system attractive.

The capital unprofitablity of the Belarusian banks averaged 8.6% in 2007 (as compared to 7.9% in 2006). According to the outcomes of the first six months of 2008 the capital porfitability was 5.4%, which is 1 percentage point above the parameter of the same period of 2007.

Date: 2014-12-29; view: 852