Foreign banks will tighten credit limits on Belarus amid political events in the country and the weakening of the Belarusian ruble, while Russian state-owned banks will be more loyal to Belarusian borrowing banks, the international rating agency S&P Global Ratings said.
Such an assessment of the situation is contained in the published message of S&P on rating actions in relation to the Development Bank of Belarus.
“We believe that given the political uncertainty and the devaluation of the Belarusian ruble in recent weeks, the credit limits of foreign banks for Belarus are likely to tighten, perhaps forcing the Development Bank to attract more funds from Russian state-owned banks, which are likely to be more loyal,” – said in a press release from the agency.
“As far as we understand, the terms of some of the foreign loans contain covenants, according to which the capital adequacy ratio should not be lower than a certain level,” S&P experts note in this regard.
“At present, we assess the ability of the government of the Republic of Belarus to provide support to organizations related to the state, as a whole, as uncertain,” they say.
As reported, S&P Global Ratings affirmed the long-term and short-term credit ratings of the issuer Development Bank of the Republic of Belarus (DBRB) for liabilities in foreign and national currencies at “B / B” and downgraded the outlook on the ratings from “stable” to “negative”.
S&P notes that the rating action on the 100% state-owned BRRB follows the September 11, 2020 revision of Belarus's sovereign rating outlook due to “heightened risks to the country's economy, financial stability and balance of payments following the disputed presidential election. last August this year. ”
The agency also reminded that “residents have increased the conversion of deposits from national currency into foreign currency and are partially withdrawing deposits from the banking system.” In this regard, the ratings of three rated large Belarusian banks – Belarusbank, Belagroprombank, BelVEB – were placed on the CreditWatch Negative list on September 11.