January 09, 2009 |
Fitch Ratings-London/Moscow- 31 December 2008: Fitch Ratings has today affirmed the ratings of Belarus-based Belinvestbank (BIB), including its Long-term Issuer Default Rating (IDR) of ‘B-’ (B minus) with a Stable Outlook and its Individual Rating of ‘D/E’. A full list of the bank’s ratings follows at the end of this commentary.
BIB’s IDRs and Support Rating of ‘5’ reflect Fitch’s view that BIB may receive support, if required, from the Belarusian authorities, but the ratings also reflect constraints on the sovereign’s ability to provide potential support, in particular because of the considerable size of the country’s state-owned banks and their foreign currency obligations relative to the sovereign’s foreign currency reserves. The Stable Outlook on BIB’s Long-term IDR reflects Fitch’s view that the sovereign currently retains the ability to provide support to state-owned banks to the extent implied by their ‘B-’ (B minus) ratings. However, the ability to provide support could be reduced, and BIB’s ratings could therefore come under downward pressure, if the Belarusian economy experiences further negative shocks.
BIB’s Individual Rating reflects the risks arising from recent rapid asset growth, high borrower concentrations and weaknesses in the operating environment. Although asset quality has been good so far (loans overdue by 90 days or more were a low 0.6% of total loans at end-November 2008), this is highly dependent on the health of Belarus’s public sector and also government finances. A December 2008 equity injection from the government in the amount of BYR200bn has improved BIB’s capital position by raising its tier 1 capital ratio, per Belarusian standards, to approximately 11.5% from a very low 6.7% at end-11M08. However, the agency still regards the bank’s capitalisation as only moderate.
The bank’s liquidity position is largely dependent on the stability of customer funding which contributed 80% of the bank’s liabilities at end-11M08. Any significant outflow of deposits could exert considerable pressure on BIB’s liquidity. However, a significant part of BIB’s funding comes from government authorities which partly mitigates the liquidity risk.
BIB’s ratings could come under downward pressure if Belarusian public and/or external finances deteriorate significantly and the operating environment worsens, which could result in both a weaker stand-alone profile of the bank and a reduced ability of the sovereign to provide support.
BIB is a universal, but primarily corporate bank, focused on supporting investment projects in Belarus by providing long-term lending. At end-Q308, the bank held 7% of system assets and 7.1% of retail deposits, and had a 8.4% market share in corporate lending. BIB is majority-owned by the state, mainly via the State Property Committee of the Republic of Belarus (85.8%) and the National Bank of Belarus (6.5%).
BIB’s ratings have been affirmed as follows:
Long-term foreign currency IDR: affirmed at 'B-' (B minus); Stable Outlook
Short-term foreign currency IDR: affirmed at 'B'
Support Rating: affirmed at '5'
Individual Rating: affirmed at 'D/E'
Support Rating Floor: affirmed at 'B-' (B minus)
|Nome completo della società||Belinvestbank JSC|
|Paese di registrazione||Belarus|