Bank Moscow-Minsk received a status of the first market maker in the Belarusian currency and stock market. The delegation of the certain powers to the bank took place at Belarusian Currency and Stock Exchange.
As the Chairman of the Management Board of BCSE Andrey Aukhimenya explained, Bank Moscow-Minsk will put up for exchange auction orders for purchase and sale of three main currency pairs: USD-BYN, EUR-BYN, and RUB-BYN. At that, the status of the market maker obliges the bank to guarantee the fulfillment of orders for purchase and sale of certain volumes of currency with the certain spread at the certain exchange rate.
It means in practice that in the course of the trading session the bank will be able to purchase currency for the economic entities or sell it on requests of the clients at more beneficial exchange rate than the official exchange rate of the National Bank forming according to the auction results. Today, the companies not participating in the exchange auction do not have such opportunity.
"It is one of the steps of improvement of the currency market that, as we expect, will lead to the liquidity growth in the market and to the exchange rate policy stabilization in the long view. The more the liquidity is, the more the demand and supply are, and the stabler the exchange rate is. Therefore, the individuals will indirectly feel it when they see stabler exchange rates," Mr. Aukhimenya noted.
Bank Moscow-Minsk will be the only market maker at BCSE for the time being. Meanwhile, the Chairman of the Management Board of the stock exchange did not rule out that other banks would be interested in the receiving of this status in the long view.
Bank Moscow-Minsk holds the leading positions in the foreign exchange market and is ready to perform functions of the market maker, the Chairman of the Management Board of the bank Igor Likhogrud commented on the receiving of a new status.
The bank closes about 10k currency purchase/sale transactions per month with the legal entities. Over January-May, the volume of currency transactions with the legal entities amounted to about USD 1.5 billion in the equivalent. The bank closes about 450k currency purchase/sale transactions per month with the individuals. Over five months of this year, Bank Moscow-Minsk purchased USD 286 million in the equivalent from the individuals on a net basis. It is 30% of the total volume of net sale of currency from the individuals by all banks over January-May. Recall that over five months the balance of net purchase by banks of currency from the individuals (cash and non-cash) totaled USD 951.6 million.
According to Mr. Likhogrud, a great number of exchange offices and profitable exchange rates allow Bank Moscow-Minsk to hold the leading positions in the foreign exchange market. It is expected that the bank and other banks will provide the individuals with an access to the foreign exchange auctions.
He added that nowadays the margin between the exchange rates of dollar purchase and sale at the exchange offices was under BYN 0.01. The banks should access the return on investment in order to give the individuals an access to the exchange auction taking into account this margin.
"About 2,250k transactions were made at the exchange offices of Bank Moscow-Minsk over January-May. Therefore, a big amount of transactions allows us to earn even when the margin is low," Mr. Likhogrud noted.
The Chairman of the Management Board of BCSE Andrey Aukhimenya confirmed that the individuals would be indeed able to participate in the exchange auctions this year. However, they can do it in the name of the banks. The direct participation of the individuals is included in the liberalization plan as of the beginning of 2018.
It will be easy for the individuals to participate in the exchange auctions this year. However, they can do it in the name of the banks. The direct participation of the individuals is included. The citizens should draw up an application in the Internet or mobile banking and indicate the amount and purchasing exchange rate. The bank will close the transaction independently at the expense of its own resources or send the application to the stock exchange where all banks operate. Taking into account that the exchange rates at the exchange offices change not so fast as on the stock exchange, the individuals will be able to make foreign exchange transactions at more actual exchange rates.
The status of the first market maker in the Belarusian currency and stock market can increase the attractiveness of Bank Moscow-Minsk for the potential buyers of the assets. Recall that the National Bank owing 99.75% of the shares of the bank plans to make the transaction in sale of controlling block of shares until January 1, 2020. The cost of Bank Moscow-Minsk was estimated at USD 55.7 million last year.
The European Bank for Reconstruction and Development is engaged in the pre-privatization preparation of Bank Moscow-Minsk. According to Mr. Likhogrud, the financial consultant was chosen. The bank plans to complete this procedure and to sign an appropriate contract in the near future.
Bank Moscow-Minsk conducts a soft credit policy this year. According to Mr. Likhogrud, "we act very carefully in terms of credit risk taking in order not to increase the volume of potentially problem risks. It affects the credit portfolio growth. According to the data of the National Bank, the volume of new credits in the system in Q1 rose by 5.0%. We have a lesser percentage by this indicator."
Following the results of Q1 this year, Bank Moscow-Minsk made BYN 2.7 million of the net profit. As compared to the same period of 2016, the total net profit fell by 3.6%. The bank took the 12th place in the Efficiency Rating of BUSINESS NEWS.