Macroeconomic overview Belarus 15 th BACEE Central and East European and Bank and Country Conference November 2006, Budapest

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Belarus Area: 207,600 sq. km Capital: Minsk Population: 10,293,011 (July 2006 est.) Labour force: 4.3 million (31 December 2005) Society: Belarusian 81.2%, Russian 11.4%, Polish 3.9%, Ukrainian 2.4%, other 1.1% (1999 census) Religion: 80% Eastern Orthodox

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest A little bit of history seven decades as a constituent republic of the USSR attained its independence in 1991 Belarus and Russia signed a treaty on a two-state union on 8 December 1999 in July 1994 first president: Alexander LUKASHENKO

Source: Ministry of Statistics the Republic of Belarus; National Bank of the Republic of Belarus, Raiffeisen Research 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Macroeconomic indicators

Source: Ministry of Statistics the Republic of Belarus; National Bank of the Republic of Belarus, Raiffeisen Research 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Russia versus Belarus in terms of Real GDP

Banking system Belarus 15 th BACEE Central and East European and Bank and Country Conference November 2006, Budapest

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Number of Banks’ branches in the Republic of Belarus and organisational units thereof 4 state banks (Belarusbank, Belagroprombank, Belinvestbank, Belpromstroibank) + 26 banks with foreign capital

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Ratio of banking sector assets and capital to GDP

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Assets as of %

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Credits by Form of Client’s Activities In Q the share of Loans to households increased to 28.5 %.

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Credits by Maturities

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Concentration

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Top-10 Banks’ Total Assets Banks Total Assets in BYR'mln as of Belarusbank10,941,100.4 Belagroprombank5,017,684.3 Priorbank (Raiffeisen International)2,417,465.2 Belpromstroibank2,023,810.0 Belinvestbank1,858,908.3 Belvnesheconombank727,337.2 Slavneftebank489,380.8 Belgazprombank434,031.1 Foreign Bank Moskva-Minsk285,254.6 International Trade and Investment Bank (ITI Bank)277,113.8

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Market share of Top-5 Banks in terms of Total Assets in 2005 Source: CNB, Raiffeisen Research

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Asset quality %

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Liabilities as of %

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Top-10 Banks’ Total Liabilities Banks Liabilities in BYR'mln as of Belarusbank9,401,377.4 Belagroprombank3,676,396.8 Priorbank (Raiffeisen International)2,072,229.6 Belpromstroibank1,774,800.1 Belinvestbank1,649,505.4 Belvnesheconombank642,150.0 Slavneftebank434,610.5 Belgazprombank392,539.9 Foreign Bank Moskva-Minsk220,785.7 International Trade and Investment Bank (ITI Bank)234,732.2

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of the Banking System Deposits by Form of Clients’ Ownership

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Deposits by Maturities

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Equity

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Top-10 Banks’ Total Capital Banks Capital in BYR'mln as of Belarusbank1,539,723.0 Belagroprombank1,341,287.5 Priorbank (Raiffeisen International)345,235.6 Belpromstroibank249,009.9 Belinvestbank209,402.9 Belvnesheconombank85,187.2 Slavneftebank54,770.3 Belgazprombank41,491.2 Foreign Bank Moskva-Minsk64,468.9 International Trade and Investment Bank (ITI Bank)42,381.6

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Capital adequacy I. %

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Capital adequacy II. % State banks: Belarusbank, Belagroprombank, Belinvestbank, Belpromstroibank

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Structure of Banks’ Income and Expenses For comparison: BYR bln Economic Profit in Q

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Income structure of the banking system

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Top-10 Banks’ Profit Banks Profit/Loss in BYR'mln as of Belarusbank82,821.5 Belagroprombank51,855.4 Priorbank (Raiffeisen International)52,223.5 Belpromstroibank33,188.2 Belinvestbank26,132.8 Belvnesheconombank6,522.5 Slavneftebank11,040.2 Belgazprombank6,140.5 Foreign Bank Moskva-Minsk11,167.9 International Trade and Investment Bank (ITI Bank)3,465.0

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Profitability ratios I.

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Profitability ratios II. %

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Source: National Bank of the Republic of Belarus Banks’ rankings Banks Ranking in terms of TA Ranking in terms of Liabilities Ranking in terms of Capital Ranking in terms of Profit/Loss Belarusbank1. Belagroprombank2. 3. Priorbank (Raiffeisen International)3. 2. Belpromstroibank4. Belinvestbank5. Belvnesheconombank6. 8. Slavneftebank Belgazprombank Foreign Bank Moskva-Minsk International Trade and Investment Bank (ITI Bank)

Source: NBB President’s September 2006 Report to President Lukashenko 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest USD 145 M. foreign funding in H state guarantee on USD 8 M. (on USD 32 M. in 2005) Foreign Ownership (Q3-2006) current quota: 20 % (this shall be abolished accessing WTO) current share: 9.3 % (in 26 out of 30 commercial banks) foreign banks are not allowed to open branch offices Loans (8-month Figures) Total Loans: BYR 18.8 Trillion (32 % increase) Retail Loans increased by 100 % Deposits (8-month Figures) Total: BYR 25.6 Trillion (24.9 % increase) Private individuals: BYR 7.3 Trillion Capital (1 October 2006) Share capital: BYR 4.27 Trillion (6.3 % increase) Capital adequacy ratio: 22 % Recent Developments I.

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest Recent Developments II. The new Banking Code (a uniform license for banking operations) replacing the 6 existing licenses General Internal Master Individual licenses Licenses for accepting deposits from natural persons Licenses for transaction involving precious metals and precious stones allowing banks to carry out operations with foreign currency outside the country (earlier 1-year delay was required) NBB revoked Djem-bank’s general and blanket licenses and the license to take individual deposits (Source: TASS Belarus Newswire)

Outlook Strengths –State support to large banks expected Opportunities –Good growth potential in a largely under-banked country Weaknesses –Low penetration –Low growth rates Threats –Economic downturn in Russia –State intervention 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest

15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest List of Banks under Bankruptcy or Liquidation as of NameDate of Registration 1. Closed Joint–Stock Company "BELKOMBANK" Open Joint–Stock Company "BELORUSSKIY BIRZHEVOY BANK" Open Join–Stock Company Joint–Stock Commercial Bank "RATON"

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest List of Reorganised Banks as of , I. Name Date of Registration Form of Reorganization Successor Bank, Reorganization Date 1. CB "DVINA" takeoverJSCB "VITCOMBANK", JSCB "VITCOMBANK" takeover OJSC "BELBUSINESSBANK", CB "GRODNOCOMBANK" merger OJSC "BELBUSINESSBANK", CB "MINSKBUSINESSBANK" merger OJSC "BELBUSINESSBANK", CB "MOGOBANK" merger OJSC "BELBUSINESSBANK", CB "ZHILCOMBANK" merger OJSC "BELBUSINESSBANK", CB "GOMELSOTSBANK" takeover OJSC "BELBUSINESSBANK", CB "KOMMERTSIA–BANK" takeover "Priorbank" Joint stock company, CB "VESTBANK" takeover "Priorbank" Joint stock company, JSCB "BELARUSBANK" merger Joint Stock Company "Savings Bank "Belarusbank", BSSR Savings Bank merger Joint Stock Company "Savings Bank "Belarusbank",

Source: National Bank of the Republic of Belarus 15 th BACEE Central and East European Bank and Country Conference November 2006, Budapest List of Reorganised Banks as of , II. NameDate of RegistrationForm of ReorganizationSuccessor Bank, Reorganization Date 12. JSCB "BELSVYAZBANK" takeover Joint Stock Company "Savings Bank "Belarusbank", JSCB "BELZHELDORBANK" takeover Joint Stock Company "Savings Bank "Belarusbank", JSCB "BRESTCOMBANK" takeover Closed Joint–Stock Company "BELKOMBANK", JSCB "AMKODORBANK" takeover Open Joint–Stock Company "BELVNESHECONOMBANK", OJSC "BELCOOPBANK" takeover Open Joint–Stock Company "BELVNESHECONOMBANK", JSCB "BELORUSSKIY MEDITSINKIY BANK" takeover Joint Stock Bank of Reconversion and Development, OJSC "BELBUSINESSBANK" merger "Belarussian bank of development and reconstruction "Belinvestbank" Joint–Stock Company, OJSC "BELORUSSKIY BANK RAZVITIYA" merger "Belarussian bank of development and reconstruction "Belinvestbank" Joint–Stock Company, Joint Stock Company "MINSKCOMPLEXBANK" takeover Joint Stock Company "Savings Bank "Belarusbank", Closed Joint–Stock Company "TORGOVO–PROMYSHELNNY BANK" takeover Open Joint–Stock Company "TECHNOBANK",