OREANDA-NEWS.  On 04 June was announced, that Belgazprombank is sixth among all Belarusian banks by profit in Q1, says Belorusy I Rynok, the country’s leading B2B weekly.

Belarusian banks perform well despite the financial crisis

All Belarusian banks reported profits in the first quarter of 2009, although some banks suffered losses on certain activities.

Of all banks, Priorbank reported the largest balance-sheet profit in Q1 – 95.6 billion BYR, which exceeds its 2008 profit. Belgazprombank earned 14.5 billion BYR – taking the sixth place among Belarus’ top ten banks.

The situation was a bit different in 2008: state-owned Belarusbank and Belagroprombank occupied the first place by profits, followed by Priorbank. Belgazprombank outplayed top ten Belarusian banks by profit growth rates (2.5 times) in 2008.

Losses caused by devaluation

Worse profitability parameters reported by state banks in Q1 can be explained by losses on FX transactions. All the four state-run banks ranked among Belarus’ leading banks (Belarusbank, Belagroprombank, BPS-Bank and Belinvestbank) had negative net FX profits. That was probably caused by depreciation of the national currency.

The majority of banks, however, managed to make gains on the booming FX market and devaluation of the ruble. In the first quarter of 2009, banks’ net profits from FX operations more than doubled compared to the last year’s same period –reaching 120.6 billion BYR.

As usual, lending operations brought the largest profits to Belarusian banks. Net profits from interest payments totaled 517.3 billion in Q1. They are followed by net commissions; the net interest/net commissions ratio totaled 64% in Q1.

Problems piling up

Negative processes in the Belarusian economy triggered off by the global financial crisis pushed up loan delinquencies. Non-performing loans account for 2.23% of all assets exposed to banking risks – a 2.07% rise on 1 March 2009.

The National Bank warns that this parameter might increase to 4% by the end of the first half of 2009. This forecast rests on the structure of banks’ loan portfolio – comprised mostly of personal loans to be repaid within first six months of 2009. However, the National Bank predicts lower rates of loan delinquency growth by the end of the year.

The National Bank does not say anything about loan delinquencies faced by each bank, but they can be figured out by amounts that banks transfer to provisions.

On the one hand, higher transfers to provisions point to worsening of banks’ loan portfolio, on the other, it means that should borrowers overcome their financial difficulties, banks’ profits might grow.

In April, banks tended to transfer less money to provisions (105.3 billion BYR against 114.7 billion BYR in March); this signifies a slight improvement in the country’s lending market. But in April 2008 net transfers to provisions totaled just 40.2 billion BYR. That means that the banking system is still facing a financial turmoil, yet the recession has slowed down.

Banks’ profits in April totaled 89.6 billion BYR – 4.3% lower than in March. However, compared to last April, the profits increased by 16.2%.

Fall in profits in April has been caused by a sharp decrease of other net incomes – from 509.4 billion BYR in January to 90.5 billion BYR in April.