Are Banks Preparing For Mass Exodus From Belarus?
- 21.07.2022, 16:53
The first has already gone.
The number of banking system players is decreasing in Belarus. Absolutebank changed its legal status in July. It became not a bank, but a non-bank credit and financial institution.
Other financial organizations can follow the example, belmarket.by reports.
There were 24 banks in the banking system a year ago, but this value did not become static. At the end of last year, the process of joining Idea Bank to MTBank was completed, and in May 2022, Fransabank was absorbed by the Belarusian Alfa-Bank.
However, that was not the end of the banking sector's compression process. As mentioned above, in July the shareholders of Absolutbank decided to rename it into a non-bank financial institution.
What is the difference? A non-bank financial institution has no right to provide many financial services to the clients. Thus, Absolutbank, after being transformed into the Optikurs non-bank financial institution, will not be able to attract deposits from the population, open and maintain accounts of individuals, and issue payment cards.
Neither Absolutbank's nor the National Bank's commented on the bank's decision to change its legal status. However, it is known from open sources that last year the bank fell under US sanctions and then stopped part of its business, in particular, suspended the service of Visa international payment system cards.
Another important detail: the mentioned bank was among the outsiders in terms of the size of the regulatory capital.
Until 2015, the National Bank required that the capital of all banks corresponded to 25 million euros, and achieved this. Banks that failed to comply with this requirement left the market.
In 2016, the National Bank began to establish requirements for the banks' capitals in rubles and increase them to the level of inflation. For 2022, the minimum amount of bank capital is set at 66.66 million rubles.
Zepter Bank did not comply with this standard (the bank's capital amounted to 62.21 million rubles) as of June 1. In addition, four more banks (Reshenie Bank, BTA Bank, RRB-Bank, Statusbank) have capital values close to the threshold value. Their capital exceeds the minimum level by only a few percent.
Accordingly, if from 2023 the National Bank traditionally increases the capital requirements of banks by the level of inflation (which this year has already exceeded 17%), the listed banks will not be able to meet an important requirement, which, in turn, will lead to the loss of a banking licence.
The National Bank may negotiate this problem with small commercial banks soon. They can discuss the compliance. It will depend on the regulator which commercial banks will remain and who will have to leave the market.