Belarusian banks’ net interest margin drops to 3.6% in 2020 - National Bank
<p> MINSK, Jan 29 - PrimePress. The net interest margin of Belarusian banks decreased from 4% to 3.6% in 2020, which is the lowest value since 2008. Deputy Chairman of the National Bank of Belarus (NBB) Dmitri Kalechits made a statement to this effect at an enlarged meeting of the National Bank on January 28. </p> <p> </p> <p> “In the second half of 2020, the banking sector faced a significant outflow of funds, which had a negative impact on the funding base of banks. The main factor behind the decline was the outflow of household deposits, which over the year decreased by nearly Br800 million ($305 million at the rate of the National Bank of Belarus) in home currency, while in foreign currency - by nearly $2 billion. Under these conditions, banks were forced to raise interest rates on deposits of individuals. This was facilitated by the earlier decision of the National Bank not to set the calculated values of the standard risk in this market segment,” reads the report. </p> <p> </p> <p> According to Kalechits, in December 2020, the average interest rates on new fixed-term deposits of individuals and companies in Belarusian rubles amounted to 13.2% per annum, almost a twofold increased year on year. However, there was no corresponding increase in interest rates on new loans. </p> <p> </p> <p> “In December 2020, the average interest rate on new loans provided in Belarusian rubles amounted to 10.9% per annum, which is only 0.5 p.p. higher than in December 2019. In fact, this is how banks provided additional support to the real economy by limiting their profitability,” Kalechits noted. </p> <p> </p> <p> In his words, the National Bank’s interest rate policy in 2021 will be built primarily on the need to maintain a reasonable compromise between the interests of borrowers and depositors. At the same time, increased attention will be paid to restoring the saving processes as a crucial element in the formation of a sustainable resource base to finance the needs of the economy. End </p>
2021-01-30
Primepress
Belarusian banks’ net interest margin drops to 3.6% in 2020 - National Bank
MINSK, Jan 29 - PrimePress. The net interest margin of Belarusian banks decreased from 4% to 3.6% in 2020, which is the lowest value since 2008. Deputy Chairman of the National Bank of Belarus (NBB) Dmitri Kalechits made a statement to this effect at an enlarged meeting of the National Bank on January 28.
“In the second half of 2020, the banking sector faced a significant outflow of funds, which had a negative impact on the funding base of banks. The main factor behind the decline was the outflow of household deposits, which over the year decreased by nearly Br800 million ($305 million at the rate of the National Bank of Belarus) in home currency, while in foreign currency - by nearly $2 billion. Under these conditions, banks were forced to raise interest rates on deposits of individuals. This was facilitated by the earlier decision of the National Bank not to set the calculated values of the standard risk in this market segment,” reads the report.
According to Kalechits, in December 2020, the average interest rates on new fixed-term deposits of individuals and companies in Belarusian rubles amounted to 13.2% per annum, almost a twofold increased year on year. However, there was no corresponding increase in interest rates on new loans.
“In December 2020, the average interest rate on new loans provided in Belarusian rubles amounted to 10.9% per annum, which is only 0.5 p.p. higher than in December 2019. In fact, this is how banks provided additional support to the real economy by limiting their profitability,” Kalechits noted.
In his words, the National Bank’s interest rate policy in 2021 will be built primarily on the need to maintain a reasonable compromise between the interests of borrowers and depositors. At the same time, increased attention will be paid to restoring the saving processes as a crucial element in the formation of a sustainable resource base to finance the needs of the economy. End