Credit portfolio of commercial banks deteriorated

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April 22, 2016 17:56

Decree № 306 provides for the reimbursement of costs to agro and processing enterprises for purchasing crops in 2011 in the total amount of Br 2.8 trillion.

The share of “troubled” loans in the credit portfolio of the Belarusian banks increased up to 1.18% by 1 June 2011 as compared with 0.94% of 1 June 2010, the overall amount increased in January-May 2011 by 2.5 times, up to Br 1.714 trillion. The part of overdue debt was 52.8% on June 1, against 25.1% at the beginning of 2011.

In January-May 2011 the Belarusian banks increased their credit portfolio by 36.4%, up to Br 145.814 trillion.

Comment

Economic and monetary crisis has only started affecting commercial banks. Due to the state’s policy of shifting of financial burden partially on concessional financing and subsidizing of the Belarusian economy by commercial banks, as well as its unwillingness to cease concessional financing of agriculture and housing, the financial state of commercial banks will continue deteriorating gradually. A lot will depend on population’s confidence in the existing policies. If the trend with withdrawal of foreign currency deposits continues, it is possible that by autumn-winter a large-scale banking crisis will unfold. The largest state owned banks: Belarusbank and Belagroprombank are at highest risk in this regard.

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