Economist: There’s “Hole” Of More Than Three Billion In Belarusian Banking System

The distressed assets of the Belarusian banks top record levels.

According to the businessForecast.by calculations, in case the Belarusian banks have formed special provisions in the amount of 100% of the distressed asset value, the domestic banking sector would have recorded a loss in the amount of minus 3.265 billion rubles instead of the declared profit of 462.4 million rubles in January-August 2016.

The experts calculated those “distressed assets,” which are sometimes called the money buried in the ground – to finance the village, which, as a rule, does not give credits back, to credit failed investment projects and practically impaired enterprises. Simply said, they are the assets that are unlikely to ever return to the banks.

– However, to make it clear, we are talking about an extremely negative scenario in this case, –economist Aliaksandr Mukha says, – in which all the distressed assets of the banks are, in fact, irrevocable and require special provisions on a full scale (that is in the amount of 100 % of the distressed asset value). In fact, the quality of the banks' distressed assets varies.

It varies, but, it seems, not enough to mend the “hole” of 3,265 billion rubles.