The banking system developed in Q2 as part of the general economic paradigm. The Belarusian banks faced the following main challenges: business decline, personal income drop down, and clients' paying capacity worsening. The system continues to develop under the control of the National Bank that reduced the key rate three times over three months.
Three leaders of the Belarusian Banks Efficiency Rating for H1 2016 remained unchanged.
TC Bank headed the rating. In H1, the bank made the highest net profit among all participants of the banking system. Over January-June, the net profit of the bank with the Iranian capital grew as compared to the same period last year by 7.6 times or BYN 47.1 million and amounted to BYN 54.1 million as of July 1. However, the most part of profit was made by TC Bank in Q1. It equaled to BYN 47.9 million. According to the results of Q2, the net profit of the bank totaled BYN 6.2 million, which is 8 times less than in January-March.
The net profit of TC Bank grew mainly at the expense of the growth in interest yield. At the same time, the bank made the net profit on securities transactions and met a net loss from foreign exchange ones.
The highest net profit of TC Bank allowed it to become a leader by the ratio of profit to assets and profit to capital. As for the assets, TC Bank took just the twelfth place.
It should be noted that the activity of TC Bank is still limited by the National Bank. In late April, the Regulator extended them for a year.
Priorbank almost caught up TC Bank in terms of the net profit following the results of H1. However, substantially larger capital and assets do not allow Priorbank to compete with the bank with the Iranian capital for the leadership in the rating. Priorbank took the third place in the rating following the results of H1.
Over six months, the net profit of the bank amounted to BYN 51.3 million. This parameter decreased by BYN 16.2 million or 24.0% as compared to January-June last year.
Over six months, Priorbank increased its net interest income (from BYN 89.2 million to BYN 128.5 million) and decreased the commission income (from BYN 59. million to BYN 54.4 million). Besides, Priorbank met the loss from securities transactions to the tune of BYN 0.2 million and decreased the net income on foreign currency transactions (from BYN 24.6 million to BYN 18.3 million) in H1.
Priorbank is in the seventh place in the banking system in terms of assets, in the seventh place in terms of the ratio of profit to assets, and in the sixth place in terms of the ratio of profit to capital.
MTBank, whose profit is twice less than those of its two nearest competitors, managed to take the second place in the Belarusian Banks Efficiency Rating in H1.
The net profit of the bank increased as compared to January-June 2015 by 5.1 times to BYN 23.0 million. The bank made the net profit because the net interest income rose by 56.4%, and the net commission income increased by 13.6%. The net income on foreign currency transactions went up by 29.6%, and other income increased by 2.4 times.
The bank took the 11th place in terms of the assets as well as the 3rd and the 2nd places in terms of the ratio of profit to assets and profit to capital, respectively.
Idea Bank and Belgazprombank changed places with each other among five leaders.
Idea Bank managed to take the fourth place thanks to the improvement of positions in the rankings in terms of the ratio of profit to assets and profit to capital. In Q2, the bank managed to make the same profit as in January-March. Over H1 2016, the profit of Idea Bank was 6-fold more than in H1 2015 – BYN 11.5 million versus BYN 1.9 million.
Belgazprombank decreased its profit in H1 2016 as compared to the same period of 2015 by 17.8% to BYN 43.5 million. Meanwhile, the bank took the fourth place by the net profit among all 25 banks operating in Belarus.
"In Q2 2016, the bank was primarily under the influence of macroeconomic factors such as continuing economic recession, the payment for natural gas supplied by Gazprom JSC as well as the monetary policy of the National Bank aimed at the interest rate reduction on the financial market of the country," Belgazprombank told BUSINESS NEWS.
The share of distressed assets of legal entities and individual entrepreneurs at Belgazprombank rose by 0.9 percentage points over Q2 2016 and by 1.5 percentage points over H1. The share of overdue credits is 3.4% of the bank's credit portfolio.
"The worsening of financial standing of a number of debtors is mainly due to the macroeconomic factors," the bank stated.
BSB Bank made the most positive shift in the rating according to the results of Q2. It moved from 14-16th position for Q1 to 7-8th position for H1 that it shared with Bank BelVEB that also moved from the 9th rating position for Q1 2016. It happened thanks to the significant net profit growth in Q1. The bank increased its net profit by 2.5 times as compared to Q1. In H1, BSB Bank made the profit amounting to BYN 5.2 million, which is 21.7% more than in January-June 2015.
RRB-Bank went up by six positions (from the 17th to the 11th place), Belarusbank moved up by five points (from the 18th to the 13th position). Both bank made it at the expense of the profit increase.
BPS-Sberbank slightly improved its position in the rating. It moved from the 19-20th positions for Q1 2016 to the 15-17th ones for H1. The bank improved its position in the rankings in terms of the ratio of profit to assets and profit to capital. The net profit of one of the systemically important banks of Belarus grew in Q2 as compared to Q1 by 11.8 times. However, it decreased in January-June 2016 as compared to the same period of 2015 by 25.5%.
As BPS-Sberbank noted in the comments to BUSINESS NEWS, the bank had developed a program aimed at the activity optimization. This program is based on the competent cost management with simultaneous increase in riskless transactions and operation with distressed assets. A set of actions allowed cutting down expenses on some items and decreasing Cost/Income ratio to 44%.
In Q2, BPS-Sberbank invested BYN 1,542.4 million, which is 56.3% more than the appropriate period last year. The highest ratio of the credits granted to legal entities in Q2 2016 is about 80% of the working capital loans. At the same time, the bank stated a growth in troubled debt.
Bank Moscow-Minsk fell most of all in the rating. It lost 9 positions and moved from the 13th to the 22nd place. It was due to the critical profit decline in H1 2016 as compared to the same period of 2015 – from BYN 8,026.3 thousand to BYN 960.3 million. In Q2, the bank made the net loss amounting to BYN 1.8 million. It should be noted that a permanent Chairman of the Board of Bank Moscow-Minsk was elected in mid-May. It is Igor Likhogrud, ex-Deputy Chairman of the Board of Priorbank.
Belinvestbank kept the 21st position in the rating according to the results of H1. It lost the points in terms of the assets and the ratio of profit to assets but improved the positions in terms of the ration of profit to capital. The bank decreased its net profit in H1 by 3.5 times to BYN 2.3 million.
Belinvestbank told BUSINESS NEWS in the comments that the bank, as a whole banking system, is in Q2 under the influence of "economy problems defined by business loss of economic entities due to the contraction in business conditions on the domestic and foreign markets, the growth in accounts receivable, the increase in share of loss-making enterprises (organizations), the aggravation of tension on the labor market, the inflation over the planned level, the continuing real personal income falling, and the currency market volatility."
As the most important factor that adversely affected Belinvestbank, one pointed at the troubled debt growth and the necessity to increase costs to form reserves to cover potential losses. One of the factors is an interest policy of the National Bank.
The only bank met the net loss in H1 – N.E.B. Bank – kept the last position in the Belarusian Banks Efficiency Rating. Its net loss over H1 was BYN 2.9 million, although the bank made the net profit amounting to BYN 409.4 thousand in January-June 2015. Over Q2, the bank increased the net loss almost twofold as compared to Q1.