BELARUS NEWS AND ANALYSIS

DATE:

20/06/2008

Belarus' Belpromstroibank assigned 'B+/B' ratings; outlook stable - S&P

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services has assigned Belarusian bank Belpromstroibank JSC its 'B+' long-term and 'B' short-term counterparty credit ratings with a stable outlook reflecting the high economic and industry risks in Belarus, the bank's high credit risk, which results from rapid loan growth and high single-party concentration and its barely adequate capitalization.

S&P said that Belpromstroibank's majority ownership by the Republic of Belarus of about 92 percent, its good market position and customer franchise, and its adequate funding profile and profitability support the ratings.

Belpromstroibank ranks as Belarus' fourth-largest bank with a 12 percent market share in customer deposits.

S&P added that it considers Belpromstroibank as a government related entity, and consider that the government is very likely to provide extraordinary support to the bank in case of need.

About two-thirds of Belpromstroibank's loans are extended to state-owned enterprises, mirroring the structure of the economy. Credit risk is high, due to rapid loan growth, an unseasoned portfolio that has not been tested in an economic downturn, and large single-party loan concentrations, it said.

S&P expects Belpromstroibank to continue its rapid expansion in line with its business strategy, while maintaining an adequate asset quality and financial performance.

Although the government is looking to attract new shareholders to the bank in the medium term, we expect the relationship between Belpromstroibank and the state to remain strong, the rating agency said.

Source:

http://www.hemscott.com/news/static/tfn/item.do?newsId=65115999252041

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