Page 24 - BELRptAug18

January-August 2016 to $77mn in October 2017 – June 2018. The amount of foreign currency that Belarusian companies sold is determined by their demand for Belarusian rubles to pay things like payroll and taxes. The abolishment of mandatory foreign currency sales represents another step on the way towards harmonizing currency regulations in the Eurasian Economic Union (EAEU).
Additionally, during the last days of 2017, the National Bank abolished target purchase of foreign currency and approved a new version of the Instruction on currency exchange transactions. Starting from 11 April 2018, companies will be no longer be obliged to strictly adhere to the purpose for which foreign currency is purchased.
8.0 Financial & capital markets 8.1 Bank sector overview
The financial sector remains a contingency liability to the government
and a potential risk for macroeconomic stability, despite some improvements. Regulatory NPLs (the three riskiest categories) have stabilised, reaching 12.8% of gross credit exposure in 3Q17 due to the improved macroeconomic backdrop leading to lower interest rates and lower exchange rate volatility.
Capitalisation levels have improved somewhat, but remain modest given high credit risks. The large presence of the public sector (65% of assets) creates fiscal risks for the sovereign due to the potential need of further capital injections, execution of guarantees and issuance of securities in exchange of loan transfers.
Russia's state-owned banking giant Sberbank considers Belarus as a “stable profitable investment destination,” Sberbank's president and chairman of the board German Gref said in a televised interview, state news agency BELTA reported on June 4. The statement followed Sberbank's decision to scale down its European operations due to Western financial sanctions against Russian state-owned companies and banks. However, the lender is going to retain its presence in Belarus and Kazakhstan – Russia’s most important post-Soviet allies from the region. "The operations in Belarus generated a 17% return on capital last year, which is pretty good for the banking sector, although it is lower than in Russia," Gref said in the interview. "I believe this year the figure will increase to 20%, which is a normal indicator for us."
The National Bank of Ukraine (NBU) sees no reasons to greenlight the second request made by the small Minsk-headquartered state-owned lender Paritetbank to purchase the Ukrainian operations of Russia's Sberbank, after the recent rejection of its first bid by the regulator. The NBU's deputy governor Kateryna Rozhkova said in an interview with Reuters on July 24 that the outcome was yet to be determined, but she did not see how it could be different this time around. "We have refused this bank before," she added. "I cannot imagine what new argument they can provide." Staff at the central bank are still reviewing the application, however, she said, and have three months from its submission to decide. Meanwhile, according to bne
24 BELARUS Country Report August 2018 www.intellinews.com