National Bank measures to reduce consumer lending lower banking sector profits
Data on banks’ profits in H1 2014 recorded a decrease in net profits equivalent of USD 311.8 million, or 17.2%, compared with H1 2013.
The decline is due to the changed game rules on the consumer lending market, which have resulted in banks’ lower profitability. The banking sector is expected to adjust the number of employees, reduce advertising costs, reduce interest rates on deposits, slowdown network expansion, and smaller banks might experience mergers and purchases. Due to sanctions on Russian banks, their profitability in Belarus may fall, and customers fearing for their assets might shift to Belarusian banks.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.