1 November, Minsk /BELTA/. Belarus has significant potential for attracting external financing. This conclusion was reached by IMF experts, as reported by a BELTA correspondent. In October, the Fund published its quarterly report "Global Financial Stability Report. October 2010. Sovereigns, Funding, and Systemic Liquidity".
For instance, in 2009, the volume of attracted external financing in the form of bond issuance, foreign loans, and ordinary share sales amounted to only $53.5 million and was represented by two syndicated loans raised by banks, compared to $327 million in 2008 and $302.8 million in 2007. In the first quarter of 2010, Belarusbank raised a syndicated loan of $60 million, while no corresponding operations were conducted in the second quarter of the current year.
According to the IMF, Belarus currently maintains a high level of regulatory capital adequacy in its banking sector (in June 2010, this indicator stood at 19.8%, compared to 19.8% in 2009 and 21.8% in 2008).
The share of non-performing loans in the banking sector also remains relatively low compared to other countries. Thus, the proportion of problem assets in the Belarusian banking system increased to 4.9% in June 2010. According to the National Bank, as of September 1, 2010, the share of problem assets in credit-risk-exposed assets increased to 5.4%. In contrast, Ukraine's share of non-performing loans in its banking system was 41.6%, Kazakhstan's was 26.9%, Lithuania's was 19.2%, Latvia's was 17.9%, Moldova's was 17.3%, Serbia's was 16.5%, Russia's was 9.5%, Hungary's was 7.8%, Bulgaria's was also 7.8%, and Georgia's was 7%.
However, IMF experts draw attention to the relatively low level of special reserves formed by Belarusian banks for potential loan losses. In June 2010, the ratio of special reserves to problem loans was only 44.4%. According to the National Bank, as of September 1, 2010, the ratio of actually created reserves for credit-risk-exposed assets to the volume of problem assets decreased to 41.4%. For example, in Serbia, this indicator stands at 163.5%, in China - 155%, in Venezuela - 139.5%, in Kazakhstan - 137%, in Georgia - 121.2%, in Egypt - 100.4%, in Russia - 100%, and in Turkey - 83.5%.
According to specialists' assumptions, if reserves for potential loan losses are fully formed, the profitability, return on equity, and capital adequacy indicators of Belarusian banks may deteriorate to a certain extent.
In June 2010, the return on assets of the Belarusian banking sector was 1.5%, which is a fairly good indicator compared to CIS countries and neighbouring states. For instance, in Kazakhstan, the return on assets of banks was minus 18.6%, in Latvia – minus 2.5%, in Ukraine – minus 2.1%, in Lithuania – minus 1.1%, in Estonia – minus 0.3%, in Poland – 0.8%, in Georgia – 1.2%, in Russia – 1.6%, in Moldova – 1.8%, in Armenia – also 1.8%. As of September 1, the return on assets of Belarusian banks increased to 1.65%.
In turn, the return on equity of the Belarusian banking sector in June 2010 was 9.9%. At the same time, in Latvia, the return on equity of banks was minus 29.8%, in Lithuania – minus 16.6%, in Ukraine – minus 14.8%, in Estonia – minus 3.4%, in Georgia – 6.6%, in Armenia – 8.3%, in Moldova – 10%, in Russia – also 10%, in Poland – 10.7%.
According to the National Bank, as of September 1, 2010, the return on regulatory capital of the banking system of Belarus increased to 10.93% (annualised) compared to 8.21% a year earlier.
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BELTA