Banking system
The national banking system of Belarus represents an efficient and quickly developing sector of economy formed in accordance with the objectives of social and economic development and taking account of the world standards and rules.
The banking system of the Republic consists of the following two levels:
Level one
The National Bank of the Republic of Belarus. It performs the following functions: state registration and regulation of activities of the banks; licensing banking activities; regulation of credit relations and money circulation; establishment of the procedure of settlement; it has the exclusive right to issue money.
Level two
Commercial banks and non-banking financial institutions. As of November 1, 2005, 31 banks with their 455 branches were operating in Belarus. Foreign capital has its share in the authorized capital of 27 banks, including 9 banks with 100% foreign capital. 7 banks are the residents of free economic areas. There are 12 representative offices of foreign banks (4 representative offices of the Latvian banks, 3 – of the Russian banks, the German, Polish, Lithuanian and Kazakh banks have got 1 representation office each).
The legal foundation of the banking system functioning was laid in the Banking Code of the Republic of Belarus and normative legal acts of the National Bank. Such legislation establishes the guidelines of the banking activities and legal status of the subjects of banking relationships, regulates relations between the same, and establishes the procedure of formation, activity, reorganization, and dissolution of any banks (non-banking financial institutions).
The subjects of banking relationships, when effecting any banking transactions with non-residents, also apply the international unified rules and practice, normative acts of the international organizations, international banking standards, and other legal acts, provided they are not in conflict with the legislation of Belarus.
High rates of growth in the population’s cash incomes, improved financial status of enterprises in sector of the economy and advantages of ruble deposits to the level of real yield compared to time deposits free convertible currency have contributed to maintaining the trend of dynamic increase in time ruble deposits natural persons and legal entities, with the growth being 26.3% and 49.9% respectively over the year.
A positive trend of strengthening the banking sector persisted in 2007. As of 1 January 2008, the Belarusian banking system comprised 27 banks with 368 branches, of which 23 banks are foreign capital banks, including 7 banks with 100-percent foreign capital. In addition, 8 Offices of foreign banks operate in the country.
As of January 1, 2009, bank assets totaled Br63.38 trillion, up 52% over January 1, 2008. The growth was higher than expected (33-37%). The revenue-yielding assets amounted to Br0.2 trillion, or 89.8% of net assets. Their share in the aggregate assets increased by 1.4% last year, which means that the quality of Belarusian banks is improving.
Corporate loans accounted for 54.3% of the banking assets, retail loans for 20.1%, credits to state administration bodies for 9.9%, interbank lending – 3%, loans to the National Bank – 5.55%, to non-residents – 4.45%, other assets (main assets) – 2.7%. As of January 1, 2009, the loan portfolio was Br50.3 trillion, up 55.7% over 2008. The share of bad loans reduced from 0.7% to 0.6% of the total loan portfolio. In accordance with the National Bank recommendations, the share of bad loans was not supposed to exceed 2% in 2008.
The active inflow of foreign capital which started in 2007 continued into 2008. In 2007-2008 the interest of foreign strategic investors in Belarus’ banking industry was invigorated partly due to the measures taken to increase the investment attractiveness of the national economy and partly due to the stability and effective operation of the banking system and prospects of the national
economy’s fast growth.
At present the state (the State Property Committee, executive authorities, the National Bank, other state agencies) owns various stakes in sixteen Belarusian banks. In line with the banking industry development guidelines state agencies are supposed to withdraw from most of these banks. In some cases the shares will be sold to strategic investors.
There are several representative offices of foreign banks in Belarus, including banks of Lithuania, Germany, Ukraine, and Russia.
All the largest Belarusian banks have been rated by international rating agencies Fitch Ratings and Moody’s Investors Service. To protect the interests of both investees and lenders, only banks with minimum €10 million of own capital are eligible for keeping deposits of individuals.
By supervising and regulating activities of banks and other financial organizations, the National Bank of the Republic of Belarus promotes the development of the Belarusian banking system, stability of the Belarusian ruble, efficient and reliable functioning of the Belarusian payment system.
Today Belarusian banks provide a wide range of services, including insurance, property management, purchase and sale of securities and precious metals, consultancy, etc. The Belarusian banks introduce the latest credit and financial services such as leasing, factoring, trust management and others. Special attention is paid to lending under investment projects, housing construction, and agribusiness support programs.
Lending to individuals, especially consumer lending, is growing fastest. The system of non-cash payments involving plastic banking cards is effectively operating. Cards of the national system BelCard and international banking associations VISA, Europay/MasterCard are in circulation.
