Belarusbank – hazardous credit game

• 23.04.2008, 9:38

Belarusbank is looking for a foreign investor. The reason is complicated situation of the biggest Belarusian bank, which can’t pay off its creditors.

Belarusbank’s credit resources debt to foreign banks and financial companies for January – March has grown by USD 40 million. The debt amounts to USD 239.6 million (of equivalent) for 1 April.

Year-on-year this rate growth was 144.3 per cent in the first quarter of the year, which is indicative of complicated and even critical situation in the main bank of the country. The administration of the bank doesn’t explain how they are going to pay debts. However, experts’ concern may be premature, “Belorusski Partizan” writes.

The bank’s untied debt amounts to USD 230 million, including syndicated loan – USD 105 million, and of loan participation notes (LPN) – USD 125 million.

Late payment of debts can frustrate plans of the bank on attracting foreign credit resources this year. Belarusbank plans to attract USD 800 million foreign credit resources. In particular, the bank is going to issue Eurobonds for the sum of USD 300 million and attract subordinated loan of USD 50 million for 5 years. Moreover, the bank is planning to issue stock in the amount of up to 15 per cent of the authorised fund and sold them to foreign investors in 2008.

Experts have noted long ago the Belarusian state in whole and the biggest state-running bank – Belarusbank, conduct a very hazardous credit policy. In pursuit of additional resources, limiting factors, risk and security assessments have stopped playing a crucial role.