Development Bank of Belarus to finance capital-intensive long-term projects
January 29, 2013 БЕЛТА
OAO Development Bank of the Republic of Belarus (DBRB) will extend credit to complicated capital-intensive and long-term projects, DBRB Chairman of the Board Mr Sergei Rumas told media at the bank’s presentation on 28 January.
According to Sergei Rumas, the Bank is not meant to compete with commercial banks. It will act as a special financial institution to stimulate the economic development of the state and raise the reliability of the country’s financial credit system. “Hence the tasks we have to accomplish: the financing of the most important investment projects within the framework of government programs and the buyout of assets, which were allocated for these purposes earlier, from banks,” said the DBRB head.
He underlined that generating profits is not a strict requirement for the bank but a guideline. “Our bank is aimed at extending credit to complicated capital-intensive and long-term projects, this is why we have a compact organizational structure, minimal operational costs that in the end allow offering an interest rate on loans below the market,” said Sergei Rumas.
The Development Bank is entirely owned by the state. The bank founders are the Council of Ministers and the National Bank of the Republic of Belarus. All the strategic decisions will be made by the general meeting of shareholders. All the important decisions will have to be approved by the supervisory board led by Prime Minister of Belarus Mr Mikhail Myasnikovich. Out of seven members of the board three ones (43%) are independent. It corresponds to the best world practices of corporate management.
According to Sergei Rumas, the bank has managed to achieve progress within 1.5 years of operation. “We have resolved all the organizational issues and problems of establishing cooperation with market participants. We have also accomplished the task of raising the stability of the banking system by taking over a considerable volume of assets from state banks,” he remarked.
The Bank has started investment crediting of government programs. The procedure covers the entire cycle from choosing a project, examination of the business plan to the issuance and service of the loan. In 2012 the Development Bank managed to attract resources of major commercial banks for the sake of financing plans to modernize the agriculture. Br540 billion was the sum of the deal. “We plan to continue promoting this form of partnership,” remarked Sergei Rumas.
In late 2012 the government capitalized the Development Bank. In line with the President’s executive order of 10 December 2013 as much as Br3 trillion was transferred to the Bank’s authorized fund. “We are grateful to the government for this contribution and deem it as support for our strategy of accelerated development,” stressed the head of the bank.
OAO Development Bank of the Republic of Belarus was created in 2011 by the relevant presidential decree. In 2013 the Bank intends to issue at least Br5.5 trillion in loans for the implementation of investment projects. According to the Finance Ministry, in January-September 2012 the Development Bank was one of the most profitable public joint-stock companies of Belarus, with net profit at Br2.5 trillion.