Liabilities

Before 2005, the main resource of the banking system was the means of the businesses, though it was later left behind by personal means (Pic. 2).

As of January 1, 2008 they amounted to BYR 10.6 trillion (36% plus in one year) versus BYR 9.5 trillion from businesses (41% plus).

In the beginning of 2008, the banking capital ranked third by the amount of liabilities of the Belarusian banking system and as of 01.01.2008 it amounted to BYR 6.7 trillion (28% plus during the year). An essential portion of liabilities are the funds of non-residents and the national government of the Republic of Belarus, which on the same date amounted to BYR 5.3 trillion (81% plus) and BYR 4.7 trillion (60% plus), accordingly. The funds of non-residents were used for the prevention of the bank liquidity crisis in the beginning of 2007 when there was a personal and business capital export from the banking system.

In 2008, however, the situtation changed and in the 5 months of 2008 the national government assets in commercial banks grew by 57% to BYR 7.3 trillion, thus exceeding the assets of non-residents and the banking capital.

Such a trend of component banking liabilities reflects their role in the banking system. The funds of non-residents represent a type of a reserve that is used by businesses and banks when they lack their own resources. During the first six months of 2008 the proper funds of the residents and the government of the Republic of Belarus were quite sufficient, therefore the activity of the banks reduced in terms of attraction of foreign funds.

The growth of state funding can be explained by the fact that in the end of 2007 the government of the Republic of Belarus received a credit from the Russian Federation in the amount of USD 1.5 billion and it re-sold considerable shares of a number of Belarusian open joint-stock companies. However, when in 2007 the received funds were mostly transferred to the National Bank for the purpose of replenishment of the national gold and hard currency reserves, in the first half of 2008 the government began to provide a more substantial financing to commercial banks.

All other resources of the Belarusian banks that, in particular, include the funds of banks and local authorities, amounted to BYR 3.2 trillion in liabilities as of 01.01.2007 (78% plus in 2007).

The Belarusian banking system appears quite adequate in terms of capital sufficiency. According to the National Bank, as of July 1, 2008 the capital sufficiency of the Belarusian banking system was 14.3% and the amount of the above parameter would substantially differ in various banks. The smaller is the bank, the higher is usually its capital sufficiency, while in large state-run banks this parameter is below average. Such a peculiarity increases the reliability of the banking system operatio: small banks have a high financial sustainability, while state-run banks may rely on the government support. Therefore, large banks use capital much more efficiently than small banks. Their capital profitability is on average higher than that of small banks.

Date: 2014-12-29; view: 843