MINSK, 1 November (BelTA) - Belarus has great potential to attract external funding, say IMF experts. In October the IMF issued a quarterly report, Global Financial Stability Report. October 2010. Sovereigns, Funding, and Systemic Liquidity.
In 2009 the volume of external financing in the form of bonds, foreign loans and the sale of general stock amounted to just $53.5 million and was represented by two syndicated loans attracted by banks. Belarus borrowed $327 million in 2008 and $302.8 million in 2007. In Q1 2010 Belarusbank raised a syndicated loan of $60 million. In Q2 2010 there were no relevant transactions.
According to the IMF, the level of regulatory capital adequacy of Belarus’s banking sector remains high (19.8% in June 2010 against 19.8% in 2009 and 21.8% in 2008).
The share of bad loans in the banking sector is relatively small as compared with other countries. Thus, the share of problem assets in the Belarusian banking system increased to 4.9% as of June 2010. According to the National Bank, as of 1 September 2010 the share of bad assets in the structure of assets subject to credit risk rose to 5.4%. At the same time in Ukraine, the share of bad debts in the banking system amounted to 41.6%, in Kazakhstan 26.9%, in Lithuania 19.2%, in Latvia 17.9%, in Moldova 17.3 %, in Serbia 16.5%, Russia 9.5%, Hungary 7.8%, Bulgaria also 7.8%, Georgia 7%.
The IMF experts also draw attention to a relatively low level of special provision for possible bad debts in the Belarusian banking sector. The ratio of special provision to the non-performing loans made up only 44.4% in June 2010. According to the National Bank, as of 1 September 2010 the ratio of the provision for the assets subject to credit risk to the amount of bad assets fell to 41.4%. This figure makes up 163.5% in Serbia, 155% in China, 139.5 in Venezuela, 137% in Kazakhstan, 121.2% in Georgia, 100.4% in Egypt, 100% in Russia and 83.5% in Turkey.
According to IMF specialists, in case Belarus creates 100% provision for possible bad debts, profitability and capital adequacy of the Belarusian banks may worsen.
In June 2010 profitability of banking sector in Belarus made up 1.5% (a good index on the back of the CIS and neighboring countries). Thus, profitability of banking assets made up minus 18.6% in Kazakhstan, minus 2.5% in Latvia, minus 2.1% in Ukraine, minus 1.1% in Lithuania, minus 0.3% in Estonia, 0.8% in Poland, 1.2% in Georgia, 1.6% in Russia, 1.8% in Moldova, 1.8% in Armenia. As of 1 September, profitability of banking assets in Belarus reached 1.65%.
The Belarusian banking sector reported 9.9% return on equity in June 2010. The return of banking equity capital made up minus 29.8% in Latvia, minus 16.6% in Lithuania, minus 14.8% in Ukraine, minus 3.4% in Estonia, 6.6% in Georgia, 8.3% in Armenia, 10% in Moldova, 10% in Russia and 10.7% in Poland.
According to the National Bank, as of 1 September 2010 the return on regulatory capital of the Belarusian banking sector grew to 10.93% (year-on-year) as against 8.21% a year ago.
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