President Lukashenko Held Meeting on Banking Business Stimulation
OREANDA-NEWS. October 15, 2009. Whether it makes sense to sell state property to foreign investors in today’s situation was the topic of today’s meeting which was held by the President and centred on banking sector development issues, reported the Official website president.gov.by.
‘This is another issue of special importance. We should discuss it openly and take a just decision on it,’ said the President. This issue is important not only from the economic but also from the political standpoint.
According to Alexander Lukashenko, today there is a need for deciding whether it is worth it to sell big financial organisations and some other Belarusian economic entities to foreign companies, taking into account today’s crisis period and the declining prices. In particular, this concerns JSC BPS-Bank, one of Belarus’ major banks.
‘Certainly, foreign investors and others are willing to become shareholders of our banks. Very large financial institutions, both western and eastern, are interested in it. But there is a need to identify clearly how we will act in this situation,’ said the Head of State.
There are lucrative proposals coming from the interested parties, which could help increase banks’ capital and their credit portfolio. ‘But a crisis is a crisis – prices fall. And the answer to the question whether some companies should be sold or not is definite, it is yes, they should be. But there is another question here: what should the price be?’ said the President.
BPS-Bank was assessed by several institutions. And the results of the assessment varied considerably. ‘Our Institute for Property has applied international assessment methods and assessed the bank very highly; western institutions, which have been hired by the interested investors, have assessed the bank two to three times less. Therefore I cannot make a final decision today when the price varies so much,’ explained the President.
Another question arises here: why is it today that there is a need to sell one of Belarus’ best banks, the more so since it is not the building that is up for sale but a well-oiled business. In 2007-2008 the state allocated Br260 billion to stimulate the growth of BPS-Bank; this year, due to the funds made available through budget allocations, the bank’s statutory fund will be increased by Br30 billion more. The bank’s assets are now US2 billion; 68 per cent of the assets are investments in the public sector.
As a result of the meeting, a decision was reached that Belarus would continue negotiations with foreign investors regarding the selling of the government’s stake in BPS-Bank but on the terms that would be most beneficial for Belarus.
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