October 18, 2010 the international rating agency Fitch Ratings upgraded the Long-term Issuer Default Ratings (IDRs) of Belarusbank to 'B' from 'B-'. At the same time, the agency has revised the Outlooks on these ratings to Stable from Negative and affirmed Individual Ratings of Belarusbank at 'D/E'.
Fitch has also revised the Outlooks on the 'B' Long-term IDRs of two Belarusian state-owned banks - Belagroprombank and Belinvestbank - to Stable from Negative.
The upgrades and Outlook changes on the state-owned banks reflect Fitch's opinion that the ability of the Belarusian authorities to provide support to these entities has strengthened since the height of the global financial crisis. Furthermore, state-owned banks' foreign currency deposits, which account for a majority of their FX liabilities, proved stable during the crisis. As a result, Fitch now believes it is less likely than before that FX deposit outflow would drive government support requirements in any future downturn. The stronger performance of the Belarusian economy, which reported 6.6% GDP growth in 9M10 compared to 0.2% in 2009, also supports Fitch's view of a more stable near-term outlook for sovereign finances and the country's banks.
Belarusbank's 'D/E' Individual rating is driven by good reported asset quality, the broad local franchise and the relative stability of its funding base. The regulatory total capital ratio was a modest 12.7% at end-H110, while non-performing loans (loans overdue by more than 90 days) stood at 2.8% at end-H110. Belarusbank is the largest Belarusian bank, accounting for 44% of the sector's assets at end-H110.
The rating actions are as follows:
Long-term Issuer Default Rating (IDR): upgraded to 'B' from 'B-'; Outlook Stable
Short-term IDR: affirmed at 'B'
Support Rating: upgraded to '4' from '5'
Individual Rating: affirmed at 'D/E'
Support Rating Floor: upgraded to 'B' from 'B-'
The full version of press-release of the international rating agency Fitch Ratings is available at www.fitchratings.ru