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Republic of Belarus:<br />
Investment Attractiveness<br />
of Banking and Financial Sector<br />
<strong>Taras</strong> <strong>NADOLNY</strong><br />
Deputy Chairman of the Board<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
BELARUS AT A GLANCE<br />
1<br />
Belarus at a glance<br />
Official name: Republic of Belarus<br />
Capital: Minsk<br />
Territory: 207 600 km²<br />
Population: 9.5 bln<br />
Population in cities: 74 %<br />
Life expectancy at birth: 70.5 years<br />
Currency: Belarusian rouble (Br)<br />
1 USD ≈ 3000 Br<br />
FX Reserves: ≈ $ 6.0 bln<br />
GDP in 2009: ≈ $ 49 bln<br />
Ratings: B+ (S&P)<br />
B1 (Moody’s)<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
ECONOMIC SITUATION<br />
2<br />
Indicator<br />
Budget Balance<br />
($ bln)<br />
Net FDI inflow<br />
($ bln)<br />
Basic macroeconomic indicators<br />
2005-<br />
2008 1<br />
0.4<br />
1.2<br />
2009<br />
-0.9<br />
1.9<br />
Jan-Sep<br />
2010<br />
GDP ($ bln) 42.9 49.0 38.7<br />
GDP (% change) 9.6 0.2 6.6<br />
GDP per capita ($) 4 436 5 094 5 431 2<br />
External public<br />
debt (% of GDP)<br />
3.6 17.1 17.6 3<br />
Inflation (%) 10.0 10.1 7.0<br />
1 average annual values<br />
2 estimated value<br />
3 January – June 2010<br />
-0.7<br />
1.1 3<br />
� High average growth rate in<br />
years 2005-2008 with some<br />
negative impact of crisis in 2009<br />
� Inflation rate capped at the level<br />
of 10 percent<br />
� Low levels of external public<br />
debt<br />
� Low level of budget deficit<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
ECONOMIC SITUATION<br />
3<br />
50.0<br />
45.0<br />
40.0<br />
35.0<br />
30.0<br />
25.0<br />
20.0<br />
15.0<br />
10.0<br />
5.0<br />
0.0<br />
0.0<br />
- 1.0<br />
- 2.0<br />
- 3.0<br />
- 4.0<br />
- 5.0<br />
- 6.0<br />
- 7.0<br />
- 8.0<br />
- 9.0<br />
- 10.0<br />
36.0<br />
- 3.5<br />
Belarus in comparison with other countries<br />
Public debt (% of GDP)<br />
32.6<br />
Consolidated budget deficit (% of GDP)<br />
medium BB Belarus B+ medium B Georgia B+ Ukraine B+<br />
- 0.7<br />
39.2<br />
- 3.4<br />
34.8<br />
- 9.0<br />
42.8<br />
medium BB Belarus B+ medium B Georgia B+ Ukraine B+<br />
- 6.0<br />
� Standard & Poor’s reports Republic<br />
of Belarus as one of the wealthiest and<br />
most developed sovereigns in the 'B+'<br />
category<br />
� Public debt and consolidated budget<br />
deficit (% GDP) are lower and GDP per<br />
capita higher than BB medium<br />
6.0<br />
5.0<br />
4.0<br />
3.0<br />
2.0<br />
1.0<br />
0.0<br />
3.9<br />
GDP per capita ($ thousands)<br />
5.1<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS<br />
2.2<br />
medium BB Belarus B+ medium B Georgia B+ Ukraine B+<br />
2.5<br />
2.2
INVESTMENT<br />
4<br />
Belarus in comparison with other countries<br />
� In the last three years the Republic of Belarus has moved in the<br />
World Bank’s rating “Doing Business” from the 115th position to the<br />
68th position.<br />
� The third leading reformer in the world for the last 5 years in the<br />
sphere of liberalization of business activities.<br />
� Aim is to enter the top-30 countries by business environment.<br />
� The 61st position in Human Development Index Ranking.<br />
� The level of HDI is higher than Europe and Central Asia average.<br />
� Aim is to enter the top-50 countries in HDI Ranking.<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
MONETARY POLICY<br />
5<br />
Indicator<br />
Change of the<br />
currency basket<br />
value (%)<br />
Refinancing rate (%)<br />
FX Reserves<br />
Increase ($ bln.)<br />
7 000.0<br />
6 000.0<br />
5 000.0<br />
4 000.0<br />
3 000.0<br />
2 000.0<br />
1 000.0<br />
0.0<br />
01.01.06<br />
1298<br />
01.07.06<br />
01.01.07<br />
2344<br />
1837<br />
4747<br />
Monetary policy indicators<br />
As of<br />
November<br />
1, 2010<br />
3.37%<br />
10.5%<br />
+0.17<br />
FX Reserves ($ mln.) mln.)<br />
01.07.07<br />
01.01.08<br />
01.07.08<br />
3565<br />
01.01.09<br />
2650<br />
01.07.09<br />
Forecast<br />
as of January<br />
1, 2011<br />
plus 10 %<br />
minus 10 %<br />
9% – 12%<br />
0.5 – 1.83<br />
5653<br />
01.01.10<br />
as of 01.11.2010<br />
5 828<br />
01.07.10<br />
01.01.11<br />
� Changes of the currency basket value<br />
are within defined bands<br />
� Our aim is to increase reserves to<br />
cover more than 3 months of import by<br />
2015<br />
3.0<br />
2.5<br />
2.0<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
01.01.06<br />
0.9<br />
FX Reserves (months of import)<br />
01.01.07<br />
0.7<br />
01.01.08<br />
1.6<br />
as of 01.11.2010<br />
2.1<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS<br />
01.01.09<br />
0.9<br />
2.2<br />
01.01.10
BANKING SYSTEM<br />
6<br />
Indicator<br />
Registered authorized<br />
capital ($ bln.)<br />
Banking system indicators<br />
As of 31 December of<br />
2005 2007 2009<br />
As of<br />
1 Sept 2010<br />
1.4 2.1 3.3 3.3<br />
Equity ($ bln.) 1.9 3.0 4.7 4.9<br />
Assets ($ bln.) 9.9 20.0 30.3 35.0<br />
Profit ($ bln.) 0.1 0.3 0.4 0.4<br />
Capital adequacy (%) 26.7% 19.3% 19.8% 19.4%<br />
Current liquidity (%) 95.9% 98.8% 172.7 % 218.0%<br />
Share of “problem”<br />
assets in the assets<br />
subject to credit risk<br />
(%)<br />
3.1% 1.9% 4.2% 5.4%<br />
Return on assets (%) 1.3% 1.7% 1.4% 1.7%<br />
Return on equity (%) 6.8% 10.7% 8.9% 10.9%<br />
� Significant growth of<br />
authorized capital and equity<br />
� Assets and profit increased<br />
more than 3 times<br />
� High liquidity growth<br />
� Increase of share of “problem”<br />
assets is a result of National<br />
Bank’s requirements<br />
strengthening<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
BANKING SYSTEM<br />
7<br />
$ mln.<br />
4 500.0<br />
4 000.0<br />
3 500.0<br />
3 000.0<br />
2 500.0<br />
2 000.0<br />
1 500.0<br />
1 000.0<br />
500.0<br />
0.0<br />
1 370<br />
9%<br />
01.01.2006<br />
1 750<br />
8%<br />
Foreign capital in Belarusian banks<br />
Foreign capital share growth<br />
01.01.2007<br />
2 100<br />
10%<br />
01.01.2008<br />
3 900<br />
17%<br />
01.01.2009<br />
3 300 3 300<br />
27%<br />
Share of countries in foreign capital<br />
Russia<br />
59%<br />
Austria<br />
13%<br />
other<br />
14%<br />
01.01.2010<br />
28%<br />
01.10.2010<br />
50.0%<br />
45.0%<br />
40.0%<br />
35.0%<br />
30.0%<br />
25.0%<br />
20.0%<br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
As of November 1, 2010:<br />
� 31 banks<br />
� 26 from them are with foreign capital<br />
including 9 banks with 100 % of<br />
foreign capital<br />
� 59 % of foreign capital is from Russia<br />
� the second most significant<br />
contributor is Austria – 13 %<br />
� among other countries are: Great<br />
Britain, Germany, Ireland, Latvia,<br />
Luxembourg, Poland, Sweden<br />
Kazakhstan the Ukraine<br />
the Netherlands the Cyprus<br />
Switzerland<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
BANKING SYSTEM<br />
8<br />
Most significant acquisitions of Belarusian banks shares shares<br />
Investor Country of origin Belarusian bank % of shares<br />
Sberbank Russian Federation BPS-Bank 93%<br />
Vnesheconombank Russian Federation Belvnesheconombank 97%<br />
Ximex Executive ltd. Great Britain Credexbank 100%<br />
Private investor Ukraine Delta Bank 89%<br />
Getin Holding SA Poland Sombelbank 75%<br />
Home Credit Group Netherlands HCBank 100%<br />
“Dogmat” Group Cyprus Mezhdunarodny<br />
Reservny Bank<br />
100%<br />
Alfa Group Russian Federation Alfa–Bank 94%<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
PERSPECTIVES<br />
9<br />
Goals and Perspectives for 2010-2015 2010 2015<br />
� Further liberalization of the economy and maintaining stable growth<br />
rates<br />
� Improvement of the business environment<br />
� Ensuring stability of banking system and national currency<br />
As a result we plan to enter:<br />
� Top-30 in the World Bank’s rating “Doing Business”<br />
� Top-50 in the Human Development Index Ranking<br />
and achieve the level:<br />
� GDP per capita – $ 25-30 thsd.<br />
� Science intensive production growth – by 3 %<br />
� Life Expectancy at Birth – 73-75 years<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
Thank You for Your attention<br />
<strong>Taras</strong> <strong>NADOLNY</strong><br />
Deputy Chairman of the Board<br />
T.Nadolny@nbrb.by<br />
NATIONAL BANK OF THE REPUBLIC OF BELARUS
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