Belarusbank Reported according to IFRS
OREANDA-NEWS. June 07, 2012. Press conference "Belarusbank: IFRS-compliant summary for 2011" was held on May 29, 2012, attended by U.Novik, Deputy Chairperson of the Board of Belarusbank, I. Lysakouskaya, Member of the Board - Chief Accountant of Belarusbank, A.Doronkevich, Director of Internal Audit of Belarusbank.
In international practice performance assessment of a bank is based on financial statements prepared in accordance with IFRS. Belarusbank was one of the first in the country to prepare statements under IFRS back in 1995. Such statements shall meet the common principles for all countries, with IFRS in fact being the international language of communication in the financial sector.
Common use of such statements by Belarusbank is determined by the significant volume of international business and the need to provide comparable data to foreign partners. Belarusbank audits IFRS statements annually with the purpose of maintaining transparency, completeness and reliability of reported data. This involves the largest international audit firms of the Big Four.
It should be noted that 2011 was challenging both in terms of macroeconomic environment and operation of the bank. Development of crisis in the foreign exchange market and the monetary sphere obviously affected the financial performance of the Belarusian banks.
The crisis of 2011 resulted in almost all systemically important banks reporting losses under IFRS. The observed inflation had a negative impact on IFRS statement of Belarusbank: a loss of 2 556.2 billion rubles was recorded in 2011.
However, current financial performance is not a key factor in assessment by the international institutions of the long-term prospects for cooperation and stability of the bank. The basis for that is assessment of the general capitalization level and fulfillment of capital adequacy standards.
As it was previously noted, during the 2011 crisis as well as at the year-end Belarusbank managed to meet the capital adequacy ratio requirements under the Basel convention which is mandatory in the international banking practice. The basis for maintenance of regulatory capitalization values under IFRS was the concept adopted by Belarusbank involving integration of assessments in accordance with IFRS in the current activities of the bank. In this process Belarusbank - one of the first systemically important banks - began to constantly monitor performance in accordance with IFRS, as well as assess the impact on international reporting of the major operations on a preview stage which makes it possible to adopt timely and, most importantly, effective management decisions.
The bank observes the necessary regulations and maturities. An effective system of risk management as well as individual approach to customers enabled the bank to avoid possible significant increase in credit risk both in 2011 and in the current year, by that retaining the geographical scope and volumes of the bank's international business, as evidenced by raising a USD 130 million syndicated loan, end of March 2012.
Strengthening of Belarusbank's position is the evidence of the growing credibility of the entire banking sector of the country. Ensuring stability of the banking and financial system has become one of the main prerequisites for improving forecasts of Belarus' sovereign rating by international agencies and the subsequent strengthening of the country's sovereign Eurobond quotations.
Thus, Belarusbank, a systemically important financial institution, showed high sustainability in volatile conditions thus making a significant contribution to the stabilization of economic climate.
The bank's management is optimistic about the future and, based on macroeconomic stability of the beginning of 2012, aims at making profit in 2012, both according to national and international standards.
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