Fitch Ratings has affirmed the foreign currency long-term issuer default ratings of Belarusbank, Belinvestbank, BPS-Sberbank, Belgazprombank and Bank BelVEB at 'B-' with stable outlooks.
The affirmation of the banks' long-term IDRs with stable outlooks reflects Fitch's expectation that Belarus will be able to avoid a full blown macroeconomic and banking crisis over the rating outlook horizon of 12 to 18 months, Reuters reports.
At the same time, downside risks for the banks' ratings remain significant, given structural weakness in the economy and pressures on external finances.
Belarus' current account deficit increased to approximately 9.5 percent of GDP in the first half of 2013 from 2.7 percent in 2012, largely due to weaker Russian demand for exports.
The current account deficit has resulted in further pressure on foreign exchange reserves, which were down by $2.1 billion, to $6.8 billion in the first 10 months of the year, while the exchange rate was down by 10 percent year-to-date, according to Reuters.
Weaker exports, coupled with relatively high interest rates, have resulted in a slowdown in economic growth of 1.1 percent year-on-year in the first 10 months of 2013 compared to 1.5 percent in 2012.
In addition, weaker demand, rising inventories and the high cost of credit have resulted in weaker credit metrics at many large companies, suggesting the potential future deterioration of banks' loan quality.
Tighter monetary policy and supervision have also resulted in limited local currency liquidity in the banking system and reduced capital cushions, respectively.
At the same time, Fitch said that Belarus survived quite extreme economic pressure in 2011, avoiding a sovereign default, and the current more flexible exchange rate should result in a somewhat greater ability to absorb future external financial shocks.
The Long-term IDRs, Support Ratings and Support Rating Floors of BBK and BIB reflect the strong tendency of the Belarusian authorities to support the banks in case of need.
- FIRST UKRAINIAN BANK - UKRAINE: FUIB doubled sales of OSAGO insurance policies
- CENTRAL BANK OF AZERBIJAN: On holding auctions on attracting funds by the Central Bank
- UNICREDIT - AZERBAIJAN: UniCredit launches first ETFs combining factor strategy with ESG criteria on European equities
- THE BLACK SEA TRADE AND DEVELOPMENT BANK: AIIB, EBRD and BSTDB co-finance expansion of Turkey’s largest geothermal power plant
- GOVERNMENT OF BELARUS: Lukashenko: Belarus wants to deepen economic ties with Latvia
- GOVERNMENT OF ARMENIA: Open Government Partnership Initiative Working Group Holds Meeting
- EUROPEAN INVESTMENT BANK: France: Derichebourg receives EIB financing of 130 million euros under the Juncker Plan
- INTERNATIONAL MONETARY FUND: IMF Executive Board Completes the Second Review under the Extended Credit Facility Arrangement and Approves US$25 Million Disbursement to Burkina Faso
- ARMECONOMBANK - ARMENIA: Salary Card with 70% Discount
- ASIAN DEVELOPMENT BANK: ADB Sells 60 Million Lari Dual-Tranche Domestic Bonds in Georgia