Fitch Affirms Belarusbank and Belinvestbank at 'B'/Negative; Withdraws Ratings

<p> MINSK, Aug 23 - PrimePress. Fitch Ratings has affirmed Belarusbank's (BBK) and Belinvestbank, OJSC's (BIB) Long-Term Issuer Default Ratings (IDR) at 'B'. The Outlooks are Negative. Simultaneously Fitch has withdrawn all the ratings, reads the agency’s press-release. </p> <p>   </p> <p> The rating action follows the EU sanctions imposed on Belarus, which specifically name BBK and BIB, on 24 June 2021. Fitch has withdrawn the ratings for both banks for the sanctions reason and will no longer provide ratings or analytical coverage for these banks. Fitch will review its decision should the sanctions be removed. </p> <p>   </p> <p> The affirmation of BBK's and BIB's IDRs, SRs and the SRFs reflects Fitch's expectation that the Belarusian authorities will continue to provide support to these banks, in case of need. In Fitch's view, the authorities have a high propensity to provide support to both banks, given majority state ownership, BBK's exceptional systemic importance and policy role, and the record of support to the banks to date. </p> <p>   </p> <p> The Negative Outlooks on the banks' 'B' Long-Term IDRs mirror that on the Republic of Belarus (B/Negative) and reflect the sovereign's potentially weaker financial position, which would undermine its ability to provide support. The sovereign's external position remains strained, with international reserves low in relation to funding requirements, and the new EU sanctions restrict the government's access to EU lenders. </p> <p>   </p> <p> The restrictions effectively cut these banks off fr om new borrowing in the EU debt capital markets and lim it availability of new credit with maturities over 90 days from EU counterparties. Both banks’ capital market activity in the EU has been limited to date and EU funding as a share of liabilities is below 5% at BBK and below 2% at BIB. Both banks have sufficient liquidity to cover upcoming repayments of EU funding. </p> <p>   </p> <p> As previously reported, the EU Council on 25 June 2021 introduced sanctions against largest sectors of Belarus’ economy entities in response to human rights abuse by Belarus authorities and the Ryanair diversion incident of 23 May 2021. The EU Council prohibited EU entities and individuals from purchasing, selling, and provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments with a maturity exceeding 90 days, issued after 29 June 2021. The government of Belarus, public bodies, corporations or agencies, or entities acting at their direction, are prohibited from acquiring insurance or reinsurance services from the EU. Any payments or disbursements by the European Investment Bank in connection with any existing agreements with the Republic of Belarus or its public authorities shall be prohibited. The ban also applies to continuation of EIB technical aid contracts. </p> <p>   </p> <p> On 9 August, the United States, the United Kingdom and Canada imposed sectoral sanctions on Belarus, including in the financial sector. Among the legal entities facing sanctions imposed by different countries are Belarusbank, Belinvestbank, Belagroprombank and Absolutbank. </p> <p>   </p> <p> Belarusbank, Belarus' largest bank, was founded in July 1991 and transformed in October 1995 through merger with Sberbank of Belarus. The government stake in the bank's authorized capital is 99.95%. </p> <p>   </p> <p> Belarus’ Development and Reconstruction Bank – Belinvestbank - was incorporated on September 3, 2001 as a result of merging two banks together Belarusian Development Bank and Belarus Business Bank. The state share in the bank's authorised capital is 99.08%. Belinvestbank is the country’s Tier 1 bank. There are more than 110 branches of the bank in Belarus. Belinvestbank has been under US sanctions since 9 August 2021. End </p>

2021-08-24

Primepress