The Belarus banking sector is characterized by a high rate of concentration. The largest bank, Belarusbank, represents 41% of the banking sector assets, and overall the first five largest banks control 80% of the assets. Four of these five banks are owned by the state, with the third largest bank being owned by Priorbank.
Financially, the banking sector is considered under-capitalized, suffering from a lack of liquidity, and pressured by the imbalance of its short-term and long-term assets and liabilities.
The state share (usually through the Ministry of Economy) in the basic capital of a bank is as much as 81%, with the share of foreign sources at 9%, domestic sources (especially industrial corporations) 7,6%, and the National Bank of Belarus (NBB) 2.8%.\
The National Bank is a state agency which is independent of the government and which reports to the President of Belarus. It does not only regulate the functioning of commercial banks by decree, but also holds stakes in some banking institutions.
Banking system structure
Banks operating in Belarus fall into two categories. The first one consists of six major banks, five of which were established on the basis of pre-existing Soviet banks: BelarusBank, Belagroprombank, Belinvestbank, Belpromstroybank and Belvneshekonombank and PriorBank, the largest privately-owned banking institution. These banks finance state programs and account for about 90% of all assets in the Belarusian banking sector. The state holds controlling stakes in the first four banks.
BelarusBank, which has taken over the branch network of the Soviet banking behemoth Sberbank, is a case apart. Fully owned by the state, it accounted for 44% of the overall loan portfolio of the banking sector, 35% of its equity capital and 62% of its deposits.
As of 1 January 2007, the Belarusian banking system comprised 30 functioning banks. Of these, 26 were foreign-invested. Ten banks were fully foreign-owned
The total number of branches as of 1 January...