BELARUS NEWS AND ANALYSIS

DATE:

24/12/2007

Belarusbank seeks foreign investor, more borrowing

By Andrei Makhovsky

MINSK, Dec 24 (Reuters) - Belarus's largest bank, state-owned Belarusbank, is considering selling a stake of at least 10 percent to a foreign investor in 2008, its deputy chairman told Reuters in an interview.

The banking sector in former Soviet republic Belarus has been growing rapidly on the back of rising loan demand from corporate and retail customers, but the state remains a dominant player, controlling four out of the five leading lenders.

Increased financing needs following a doubling of the price of gas imports from Russia has pushed the government to consider privatisation and more foreign borrowing, however.

"Belarusbank has announced a possible sale of a minority stake to a foreign investor with the aim to attract attention of big strategic investors to our bank," Deputy Chairman Vladimir Novik said.

"I think that with the support of our supervisory board we can do it in 2008," Novik said. Belarusbank, 99 percent owned by the government, has $7.7 billion in assets, which have risen more than fivefold in the past four years.

"Even if 10 percent is sold, it will be no less than $100 million, which is a big sum for a potential investor. Apart from fresh capital, we want to get access to new technology and a new approach to a bank management," he said.

Novik added that Belarusbank wanted to see a major western bank as its strategic partner rather than a Russian bank, because Russian banks could not compete with western rivals in banking technology.

This year, Russia's No. 2 bank VTB bought control of Belarussian Slavneftbank, and state Vnesheconombank (VEB) bought BelVnesheconombank.

The Belarus central bank has also announced plans to sell two small banks to Russian services conglomerate Sistema and private equity group Alfa in 2008.

Novik said the sale of the stake could pave the way for a first initial public offering by a Belarussian bank. "We have started to prepare and are now at the stage of reorganisation of our activities. Thus, 2008 is a year of preparation," he said.

Belarusbank said last month it hoped to issue a debut eurobond, planning to borrow $200 million next year, and was considering raising $100 million via a syndicated loan.

"We are currently studying the market, selecting partners and I think we will mandate organisers of a eurobond issue in the second half of January," Novik said, adding that Belarusbank was also considering a subordinated loan to boost its capital.

Belarusbank has this year released one-year credit-linked notes worth $125 million and two syndicated loans totalling $150 million. It has a Ba1 long-term rating from Moody's and a B- long-term rating from Fitch. (Writing by Maria Kiselyova; Editing by Quentin Bryar)

Source:

http://www.guardian.co.uk/feedarticle?id=7175796