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TC Bank, MTBank, and Belgazprombank are among Top 3 of Belarusian Banks Efficiency Rating at year-end 2016

Ratings
18:05 | 18.04.2017 | Business-News

In Q4, the banking system operated amid the ruble liquidity surplus and deficit in solvent borrowers among the economic entities that affected the economy crediting rates. A range of banks registered the growth in troubled assets and allocations to reserves to cover possible losses that affected the profit. The rates continued falling in the credit and deposit market. The ruble deposit yield decreased in October-December by 1-6 percentage points.

 

TC Bank, MTBank, and Belgazprombank are among Top 3 most effective banks.

 

The bank with the Iranian capital TC Bank ended 2016 in the first place in the efficiency rating in spite of the restrictions on its activity and the losses met in Q4. The losses totaled BYN 11.2 million.

 

The total profit of the bank over the last year grew by almost three times (at the expense of the effective operation in Q1) and equaled to BYN 48.1 million. The 3-fold growth in net interest income had a positive effect on the profit dynamics.

 

TC Bank took the first place in the rating in ratio of profit to assets and the second place in the rating in ratio of profit to capital.

 

MTBank took the second place in the efficiency rating. Over the last year, the bank’s assets grew by 23.7%, equity capital – by 21.6%, net profit – by 7 times (from BYN 5.2 million to BYN 37.6 million). The allocations to reserves decreased twofold, the net interest income rose by 40.5%, and the net commission income grew by 68.3%. It had a positive effect on the profit dynamics.

 

Belgazprombank moved up by one position as compared to the previous rating and ended the Top 3 most effective banks. Over the last year, the bank managed to increase the assets by almost 5.0%, the equity capital – by 17.8%, and the net profit – by 6.2%.

 

"Both external and internal factor influenced the bank's performance," the representatives of Belgazprombank commented on the operation results of 2016. "The National Bank's monetary policy changes and financial service market state in 2016 required the operational interest policy regulation and balance structure management. The effective activity of the bank in both Q4 and 2016 was provided by the internal factors aimed at reducing the resource base cost, maintaining contributions in marketable securities, selling separate credit facilities, and operating expenses optimizing."

 

The volume of the credit portfolio of the legal entities at Belgazprombank (in currency equivalent) reduced over the last year by 1.3%m while the Belarusian ruble portfolio grew by 35.6%. Over the last year, the bank increased the volume of granted credits by 73.2% as compared to 2015 mainly at the expense of the currency credits. The representative of Belgazprombank clarified that the volume of currency credits had increased by 83.09%. The volume of ruble credits rose by 1.4 times. The share of troubled debt in the legal entities' portfolio grew from 1.50% to 1.68%.

 

The volume of deposit portfolio of the legal entities and individual entrepreneurs of Belgazprombank decreased by 36.1% last year. Nevertheless, the bank increased the volume of deposit portfolio by 34.2% without regard to the funds of the large corporate depositors because the bank managed to maintain the competitive deposit interest rates.

 

The total volume of deposits of the individuals grew by 25.1% at year-end 2016. The share of the Belarusian ruble deposits grew by 0.9 percentage points.

 

Belagroprombank moved up by 14 positions (from 20th to 6th place) (the best dynamics among all banks). The bank became the most profitable over the last year (the profit grew by 5 times, from BYN 42.2 million to BYN 206.5 million) and significantly improved its positions in the rating in ratio of profit to assets and in the rating in ratio of profit to capital.

 

The transfer of troubled assets to the Assets Management agency had a main effect on the final finance result.

 

Another major state bank, Belinvestbank, shared the 21-22nd place in the efficiency rating with BNB-Bank. Belinvestbank transferred the part of the troubled assets to the Development Bank last year. The net profit of Belinvestbank was the lowest among other banks last year and totaled BYN 0.8 million.

 

The Deputy Chairman of the Board of Belinvestbank Sergey Dubkov explained that the credit risk level and further growth in troubled assets, the deficit in solvent borrowers, the declined consumption of bank products and services by the economic entities and individuals were main risks for the bank in Q4.

 

The bank had to increase the expenses to create reserves to cover possible losses due to the increased non-payments of the clients adversely affected the performance of Belinvestbank.

 

"As part of the comprehensive work aimed at improving the quality of the credit portfolio, Belinvestbank refinanced the part of the credits in the securities and removed the troubled assets by means of debt relief. At year-end 2016, the volume of overdue and prolonged debt by the legal entities' credits decreased by 40%. At the same time, the share of troubled debt also decreased in the corporate credit portfolio. This share is considerably below the average by the banking sector," Mr. Dubkov commented.

 

BNB-Bank lost seven positions as compared to the previous rating. The loss of the bank was BYN 1.1 million in Q4. The representatives of BNB-Bank explained that the fulfillment of reserve requirements by the bank had affected the financial results in October-December.

 

"When implementing the conservative policy during the creation of credit reserves taking into account the negative macroeconomic tendencies, BNB-Bank decided to create additional reserves in Q4 and maintain the steady profitable work at year-end 2016," the bank clarified.

 

The net profit of the bank totaled BYN 3.2 million over the last year, which is almost three-fold less than in 2015. As a result, the bank worsened its positions in the rating in ratio of profit to assets and in the rating in ratio of profit to capital.

 

Bank VTB lost three positions (12th place).

 

Last year, Bank VTB (Belarus) conducted enough conservative policy in the field of business financing. It paid a special attention to the adequate evaluation of the risks, especially, the credit one. As a result, the bank decreased the volume of crediting of legal entities, which is due to the low effective consumer demand for credit resources against the high level of debt load of the enterprises. The total credit portfolio of the legal entities for 2016 reduced to BYN 654.2 million.

 

The funds of the legal entities grew over the last year by 8.9% mainly at the expense of the national currency resources. At the same time, the funds of the individuals reduced by 18% to BYN 303.4 million mainly at the expense of the currency deposits. The individuals are interested in the Belarusian ruble deposits because the exchange rate became stable.

 

Technobank

 

Technobank moved from the 21st to the 17-18th place. The assets of the bank over the last year grew by 56.5% and the net profit rose by almost 6.0%.

 

Bank Reshenie took the last place. At year-end 2016, it proved to be the only loss-making bank. Its net loss amounted to BYN 5.7 million. The bank explains it by fivefold growth in allocations to reserves.

 

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