The Belarusian Banking System: Structure and Tendencies

Posted on March 10th, 2010 in: Finances

As of July 1, 2008, its assets amounted to about USD 9.8 bln – 40% of the entire Belarusian banking system (without the National Bank of the Republic of Belarus), comprising USD 24.5 bln. Another 35% of assets were kept by the three state-run banks: Belagroprombank, Belpromstroybank and Belinvestbank.

In addition to these banks, the state also owned Paritetbank with its 0.6% of the banking assets. Thus, the state is in control of virtually three quarters of the national banking assets.

With every year the influence of the Russian banks becomes more evident in the Belarusian banking system. After the Russian financial structures purchased some large stakes of a number of Belarusian banks in 2007, a Russian capital bank group was formed in Belarus, second in capital and assets to the state-run bank group.

This group includes Belrosbank and Moscow-Minsk Bank that were founded without the Belarusian capital, and Belgazprombank (major stockholders: the Russian Gazprom and Gazprombank), VTB Bank (Belarus) (main stockholder – the Russian VTB Bank), Belvneshekonombank (main stockholder – the Russian Vneshekonombank), where the Russian financial structures own controlling stakes. The Belarusian government maintains the blocking stake in VTB Bank (Belarus). Together, these 5 banks own 10.4% of the assets of the Belarusian banking system.

The third market share in Belarus (9%) belongs to Priorbank, which is a member of the Austrian Raiffeisen Bank Group.

The other 20 acting Belarusian banks share about 5% of assets in-between themselves.

The first ten largest banks are followed by 6 banks (including the state-run Paritetbank), each controlling from 0.4% to 0.7% of assets. In the other banks of the group the controlling stakes belong to various foreign investors, such the Kazakhstanian BTA Bank (the Belarusian BTA Bank) and the ABH Holding Corporation that manages the financial assets of the Russian Alfa Group (the International Trade and Investments Bank).

The other 14 banks control less than 0.2% of assets each. Two of them – the Closed Joint-Stock Company “Belarusian Bank for Small Business” that was established by a group of foreign investors including the EBRD, the IFC and the Closed Joint-Stock Company “Trade Capital Bank” (“TC-Bank”) CJSC were registered in the second half of 2008. The priority area of activity of the latter was declated as crediting Belarusian-Iraninan investment projects. Its founders are the Iranian Tejarat Bank and the Joint Venture “Lada OMC Holding”.

Asset growth rates of a number of small banks exceed the growth rates of the large Belarusian banks, through the general share of 14 small banks did not in fact change during 2007. The share of Belarusbank keeps diminishing due to the increase of shares of the other large and medium banks, however this is happening rather slowly – by 1.5 percentage points from July 1, 2007 to July 1, 2008. A number of small banks, though, have plans to grow within the next 5 years.

The National Bank has a special place among the Belarusian banks, and it is second to the “Belarusbank” Stock Savings Bank in the volume of assets. On the financial market, the National Bank is mostly engaged in operations related with regulation of liquidity of the Belarusian banking system, hard currency transactions, as well as allocatoin of the national reserves outside of Belarus.

Assets

The main types of activities of Belarusian banks include provision of credits to natural persons and legal entiteis, support of business activities and receipt of deposits. The banks’ investment activities are poorly developed in Belarus.

Thus, the major part of assets of the Belarusian banking system consists of credits to clients (Pic. 1).

These are primarily business liabilities that as of 01.01.08 amounted to BYR 22.3 trillion (46% plus in 2007). They are followed by natural persons’ liabilities that on the same date amounted to BYR 8.1 trillion (47% plus). The liabilities of state authorities and investments equalled to BYR 3.3 trillion (6.5% plus) and BYR 3.1 trillion (19% plus), accordingly.

The banks’ claims to the National Bank also constituted a large amount – BYR 2.8 trillion (21% plus). Claims to banks were only BYR 1.1 trillion (38% plus).

In 2007, claims to non-residents grew almost three times and reached BYR 2.7 trillion (191% plus). The growth of this parameter is explaimed by the growth of the capacity of the Belarusian banks and excess liquidity of some of them in the second half of 2007.

In 2006, the assets of the Belarusian banks in general grew by 40.5% to BYR 30.1 trillion and in 2007 – by 38.5%, to BYR 41.7 trillion. During the first six months of 2008 they grew by 24.9%. Despite such considerable growth rates, the bank assets to GDP ratio remain rather insignificant by international standards: it amounted to 43.4% by the end of 2007.

The National Bank’s assets grow at least as fast. As of January 1, 2008 they were BYR 15.06 trillion, increasing by 2.1 times in a year. The bank holds the majority of its assets abroad: its net foreign assets were BYR 9.1 trillion as of the same date. There it deposits its funds and the national incoming gold and hold currency reserves.

Date: 2014-12-29; view: 1105