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TC Bank, MTBank and Priorbank entered top 3 of Belarusian Banks Efficiency Rating over Q1 2016

Ratings
17:49 | 13.05.2016 | Business-News

The problem of growth in overdue debt of economic entities under the taken out credits aggravated at the commercial banks in January-March of the current year. The individuals' deposits denominated both in the national and foreign currency continued to flow out on the deposit market. The economic entities – residents and population – were both the net purchases of foreign currency (in January) and net sellers of foreign currency (February-March) on the currency market in Q1. In January-March, the National bank continued to conduct a policy aimed at interest rate reduction.

 

Net profit

 

In January-March, the commercial banks earned BYR 1,771.5 billion worth of the total net profit. As compared to Q1 2015, the total net profit of the banks grew by 30.0%. However, 10 of 26 banks recorded for the net profit drop in Q1. Other two banks (HC Bank and N.E.B. Bank) met losses. The financial indicators had an influence on the dynamics of transfer of banks in the Efficiency Rating following the results of Q1 2016.

 

Efficiency Rating

 

TC Bank with the Iranian capital proved to be the most efficient bank in January-March. It moved by two points as compared to the rating for 2015. In January-March, TC Bank became the most profitable among all Belarusian banks. Over three months, the bank's net profit amounted to BYR 479.4 billion, having increased by 8 times as compared to Q1. TC Bank left behind all systemically-important banks by the net profit growth dynamics (in absolute terms).

 

TC Bank did not specify the reasons for the significant net profit growth. Based on the data of the National Bank, a 7-fold growth in net interest income of the bank had an effect on the net profit growth in Q1 as compared to January-March 2015. The net interest income grew from BYR 37.1 billion to BYR 249.2 billion. As a top manager of one of the Belarusian banks explained, the interest income growth is connected with the active work of TC Bank on the interbank market.

 

"TC Bank earns good interest income on interbank transactions and does not bear heavy expenses. It is a low-expendable business that provides high yield," the banker explains.

 

MTBank took the second place in the Efficiency Rating for Q1, having risen by 12 points at once.

 

Over Q1, the bank assets increased by 10.5% to BYR 6,656.0 billion, the equity capital grew by 18.9% to BYR 824.7 billion. The net profit of the bank grew over Q1 as compared to Q1 2015 by more than 6 times – from BYR 21.6 billion to BYR 130.9 billion.

 

As the Chairman of the Board of MTBank Andrey Zhishkevich explained, the normative approaches of the National Bank to the creation of reserves significantly changed for the last year. In Q2 last year, the banks had to allocate large amounts to the reserves not for the troubled credits but for the credits issued at the higher rates than the rates set by the National Bank. It is a reversed situation now.

 

"Therefore, the reserves were large last year, and the profitability indicators were worse. Now the reserves gradually decrease because one repays the credits granted earlier. It affects the finance indicators. In particular, the equity capital of MTBank grew in January-March at the expense of profit capitalization," Mr. Zhishkevich clarified.

 

Following the results of Q1, Priorbank managed to stay in top 3, having moved from the first place to the third one as compared to the last rating. The bank ranked second by the net profit realized in Q1. Over January-March, the bank's profit increased by more than half to BYR 336.5 billion. According to the results of January-March, Priorbank managed to increase the net interest income from BYR 444.4 billion to BYR 647.2 billion. At the same time, the net commission income of the bank decreased from BYR 301.3 billion to BYR 263.4 billion. The net income on foreign currency transactions went down by 33.8% to BYR 101.9 billion in Q1.

 

BTA Bank showed the best dynamics of movement in the Efficiency Rating for Q1. It moved by 18 points at once – from the 24th place to the 6th one. The bank moved by 19 points in the subrating in ratio of profit to assets and by 21 points in the subrating in ratio of profit to capital. Over January-March, the bank assets increased by 34.6% to BYR 1,179.9 billion, equity capital – by more than twice to BYR 383.6 billion. The authorized fund of the bank grew 4-fold over Q1. It totaled BYR 247.5 billion as of April 1. The authorized fund increase is a part of the BTA Bank's regulatory capital increase process that began in November 2015 and will finish in Q1 2016.

 

Following the results of January-March, BNB-Bank left the top 10. It dropped from the 4th place to the 11th one in the Rating. Its net profit grew insignificantly in Q1 – from BYR 16.7 billion to BYR 17.7 billion. The bank lost 6 points in the subratings in in ratio of profit to assets and capital.

 

According to the Deputy Director General of BNB-Bank of Sergey Sabuk, a number of factors influenced the changes in the net profit of the bank in Q1. Thus, the decrease in interest rates on deposits of individuals and replacement of local resources with the attractions from the international financial institutions led to the growth in net interest income (by 11.6%). At the same time, the economy decline and worsening of the financial standing of a number of borrowers as well as the decrease in payment discipline resulted in the additional expenses on allocations to reserves.

 

Zepter Bank lost most points in the Rating over Q1. It lost 15 points. Following Q1, the bank took the 23rd place. The net profit of the bank fell by more than 10 times in January-March to the bottom value from the beginning of 2015. This bottom value was equal to BYR 1.8 billion. The net income on foreign currency transactions fell by almost 6 times from BYR 62.3 billion to BYR 10.7 billion. It adversely affected the net profit change. The bank increased the operating expenses twice in January-March to BYR 24.2 billion.

 

HC Bank and N.E.B. Bank proved to be the most ineffective banks in Q1. They met losses over January-March. Over January-March, the loss of N.E.B. Bank amounted to BYR 15.9 billion, HCBank – to BYR 35.7 billion.

 

Belarusian Banks Efficiency Rating following the results of Q1 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

TCBank

15 (0)

26 (↑3)

26 (↑6)

67 (↑9)

2

MTBank

16 (0)

23 (↑13)

25 (↑13)

64 (↑26)

3

Priorbank

20 (0)

21 (↓1)

22 (↓3)

63 (↓4)

4

Belgazprombank

21 (0)

19 (↓1)

21 (↓5)

61 (↓6)

5

Idea Bank

13 (0)

22 (↑6)

23 (↑7)

58 (↑13)

6

BTA Bank

5 (0)

24 (↑19)

24 (↑21)

53 (↑40)

7

Alfa-Bank

18 (0)

15 (↑2)

20 (↑3)

53 (↑5)

8

Bank VTB (Belarus)

19 (0)

12 (↑3)

18 (↑5)

49 (↑8)

9

Bank BelVEB

22 (0)

11 (↓3)

15 (↓3)

48 (↓6)

10

Eurotorginvestbank

2 (↓2)

25 (↑8)

19 (↑11)

46 (↑17)

11

BNB-Bank

14 (0)

13 (↓6)

17 (↓6)

44 (↓12)

12

Fransabank

7 (0)

20 (↑2)

16 (↑2)

43 (↑4)

13

Bank Moscow-Minsk

17 (0)

10 (↓5)

13 (↓8)

40 (↓13)

14-16

BSB Bank

8 (0)

18 (↓6)

12 (↓12)

38 (↓18)

Paritetbank

11 (↑1)

16 (↑4)

11 (↑1)

38 (↑6)

Belagroprombank

25 (0)

6 (↓1)

7 (↑2)

38 (↑1)

17

RRB-Bank

9 (0)

14 (↑12)

14 (↑12)

37 (↑24)

18

Belarusbank

26 (0)

5 (↓1)

5 (↓1)

36 (↓2)

19-20

Absolutbank

4 (↑2)

17 (↓9)

10 (↓9)

31 (↓16)

BPS-Sberbank

24 (0)

3 (↓1)

4 (↓3)

31 (↓4)

21

Belinvestbank

23 (0)

4 (↑1)

3 (↓1)

30 (0)

22

Technobank

12 (↑1)

8 (↓3)

9 (↓2)

29 (↓4)

23

Zepter Bank

3 (0)

9 (↓16)

8 (↓14)

20 (↓30)

24

Trustbank

6 (0)

7 (↑6)

6 (↑5)

19 (↑11)

25

HCBank

10 (↓2)

2 (↓6)

2 (↓7)

14 (↓15)

26

N.E.B. Bank

1 (0)

1 (↓20)

1 (↓14)

3 (↓34)

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