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Belarusian Banks Efficiency Rating for nine months of 2016: stability on currency market in Q3 and economic downturn

Ratings
17:20 | 15.11.2016 | Business-News

The banking system in Q3 operated when the currency market situation was stabilizing, ruble was strengthening against the main currencies, there was an excess currency supply on the domestic market, the economy was declining, and the distressed assets were growing. The monetary policy of the National Bank was aimed at the further interest rate reduction on the financial market of the country and decrease in the share of bad debts in the state banks.

 

The top three most effective banks did not change in Q3.

 

The bank with the Iranian capital TCBank remained in the first place in spite of the fact that the bank had decreased its net profit in Q3 (to BYN 5.1 million, it is the lowest quarterly index) and removed from the first place to the fourth one by the net profit made over nine months. At the same time, TCBank proved to be a leader by the ratio of net profit to assets and capital.

 

MTBank ranked second in the Efficiency Rating. The bank demonstrated the lowest quarterly net profit this year. It equaled to BYN 7.2 million. As compared to Q2, the bank's net profit fell by BYN 2.7 million. Thanks to the results of Q1, the total net profit of MTBank over nine months increased as compared to the same period of 2015 by more than three times and totaled BYN 30.1 million.

 

Among all banks engaged in retail lending, MTBank formed this year one of the largest credit portfolios of the individuals (without regard to the large state banks). According to the information of BUSINESS NEWS, the portfolio rose by 17.0% in January-August.

 

Priorbank remained in the third place in the Efficiency Rating. The bank took the second place in the system by the net profit both in Q3 and over nine months. Over January-September, Priorbank increased the net profit by 14.0% to BYN 97.6 million.

 

Belgazprombank moved from the fifth place to the fourth one. The bank took the third place by the net profit both in Q3 and over nine months. Over January-September, the bank's net profit amounted to BYN 76.7 million, having decreased as compared to the same period of 2015 by 9.0%. Over nine months, the bank increased the net interest income by 50.0% (to BYN 134.7 million) and equity capital by 19.5% (to BYN 420.4 million).

 

"As the whole banking system of Belarus, the bank's performance in Q3 was under the influence of the macroeconomic factors, continuing economic recession, ambiguous relations with the main trade partner – the Russian Federation, and the monetary policy of the National Bank aimed at the interest rate reduction on the financial market of the country. At the same time, the bank kept the position by the profitability and performance. The bank took the third place in the system by the profit in Q3 2016. The bank's indices of profitability of assets and capital exceeded not only the average indicators by the banking system but also average indices by the group of main competitors – bank subsidiaries of the major foreign banks," Belgazprombank commented on the results of its work in July-September.

 

Idea Bank closed the top five of the Efficiency Rating. It lost one position. The bank decreased the net profit in Q3 by BYN 1.0 million as compared to Q2 and made 4.7 million. Over nine months, the net profit of the bank grew more than twice and amounted to BYN 16.2 million.

 

Besides three leaders, VTB Bank (Belarus) (9th place), BTA Bank (10th place), and BNB Bank (14th place) did not change their positions in the Rating.

 

The net profit of VTB Bank (Belarus) rose by 2.3 times over nine months and amounted to BYN 13.6 million. The main factor of outrunning profit growth was a net interest income.

 

"The net profit grew because the interest income had increased by 29% (including the movement in the securities market) and the expenses had decreased by 11% at the expense of the optimization of the structure and cost of the resource base," the representatives of the bank told.

 

Bank Moscow-Minsk demonstrated the best dynamics of movement in the Efficiency Rating in Q3. It moved by 4 positions at once – from 18th place to 14th one. The bank improved its position in the rankings by the ratio of profit to assets and capital. Although, the bank's net profit over nine months decreased as compared to the same period of 2015 almost twice and equaled to BYN 3.6 million.

 

As noted above, the National Bank is going to put up the whole block of shares of Bank Moscow-Minsk for sale to 2020. The specified price is USD 55.7 million. The European Bank for Reconstruction and Development will be engaged in the pre-sale preparation of Bank Moscow-Minsk.

 

As opposed to Bank Moscow-Minsk, Belinvestbank lost one position in the rating in Q3 and took 22nd place. The EBRD is engaged in its pre-sale preparation. In July-September, the bank registered the highest net quarterly net profit this year (BYN 4.4 million), but the net profit decreased almost twice over nine months as compared to the same period of 2015 and totaled BYN 6.8 million.

 

According to Deputy Chairman of the Board of Belinvestbank Sergey Dubkov, the main factor affecting the bank's performance is the growth in troubled debts of the clients and therefore the necessity to increase the expenses on the reserve formation to cover any possible losses. In particular, the net allocation to reserve rose by 65.0% over nine months.

 

RRB Bank lost most positions in the renewed Rating. It moved from 11th place to 17th one. The bank's net profit proved to be one of the lowest in the system in Q3 and was BYN 271.0 thousand. Zepter Bank and Bank Reshenie closed the Efficiency Rating. Both banks earned the lowest net profit in Q3 – BYN 122.7 thousand and BYN 100.1 thousand, respectively.

 

Banking system in Q4. Tendencies and forecasts

 

Macroeconomic factors will continue influence the banking system in October-December.

 

Deputy Chairman of the Board of Belinvestbank Sergey Dubkov expects that the economic situation in Belarus and business environment in Q4 will not significantly change in connection with the continuing adverse impact of the external and internal factors on the economy. There are such factors as a geopolitical instability, a volatility of prices for oil and commodities, a worsening of terms of foreign trade, a paying capacity lowering, and a high credit risk of non-fulfillment of obligations to the banks. At that, the bank forecasts that the clients will slightly enliven.

 

Belgazprombank also expects for a seasonal surge in demand for credit resources from the part of the population and for the further interest rate reduction.

 

"The significant changes as compared to Q3 2016 are not expected. Therefore, the main factors influencing the operation of the bank and system as a whole will be the same," the bank noted.

 

Belarusian Banks Efficiency Rating for January-September 2016

Rank

Bank

Rating in assets, number of points

Rating in ratio of net profit to assets, number of points

Rating in ratio of net profit to capital,

number of points

Total rating, number of points

1

TC Bank

13 (0)

24 (0)

24 (0)

61 (0)

2

MTBank

14 (0)

20 (↓2)

23 (0)

57 (↓2)

3

Priorbank

18 (0)

18 (0)

21 (↑2)

57 (↑2)

4

Belgazprombank

19 (0)

16 (↑4)

19 (↓1)

54 (↑3)

5

Idea Bank

10 (0)

21 (0)

22 (0)

53 (0)

6

BSB Bank

8 (↑1)

23 (↑4)

20 (↑3)

51 (↑8)

7

Bank BelVEB

21 (0)

11 (↑2)

16 (↑3)

48 (↑5)

8

Alfa-Bank

16 (0)

13 (0)

18 (↓3)

47 (↓3)

9

VTB Bank (Belarus)

17 (0)

9 (↓1)

15 (0)

41 (↓1)

10

BTA Bank

4 (0)

19 (↓1)

17 (↓1)

40 (↓2)

11

Eurotorginvestbank

1 (0)

22 (↓1)

14 (0)

37 (↓1)

12

Belarusbank

24 (0)

7 (↑1)

5 (↓1)

36 (0)

13

Fransabank

6 (0)

17 (0)

13 (↑2)

36 (↑2)

14-15

BNB Bank

12 (0)

10 (↓1)

11 (↓1)

33(↓2)

Paritetbank

9 (0)

14 (↓1)

10 (0)

33 (↓1)

16

BPS-Sberbank

22 (0)

4 (↓1)

6 (↓1)

32 (↓2)

17

RRB-Bank

7 (↓1)

12 (↓4)

12 (↓4)

31 (↓9)

18

Bank Moscow-Minsk

15 (0)

6 (↑3)

7 (↑2)

28 (↑5)

19-22

Belagroprombank

23 (0)

1 (↓1)

3 (↑1)

27 (0)

Technobank

11 (0)

8 (0)

8 (0)

27 (0)

Absolutbank

3 (0)

15 (↑1)

9 (0)

27 (↑1)

23

Belinvestbank

20 (0)

2 (↑1)

4 (0)

26 (↑1)

24-25

Zepter Bank

2 (0)

5 (↓2)

2 (↓1)

9 (↓3)

Bank Reshenie

13 (0)

3 (↓1)

1 (0)

9 (↓1)

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