Europe is awash with development banks — outside the western half of the continent, Bulgaria, Hungary, Turkey, Croatia and Slovakia boast lenders working to boost the country’s long term prospects. But few institutions have the same domestic clout as the Development Bank of the Republic of Belarus (DBRB).
Founded in 2011, following and using recommendations and guidance from the World Bank and the International Monetary Fund, DBRB moved to help stabilise the economy by channelling lending to crucial infrastructure projects and helping to boost Belarusian exports of key goods and services.
That financial aid and expertise is sorely needed. The development bank itself said Belarus’s economy contracted by 3% in 2015, undermined by the struggles facing its biggest trading partner, Russia.
Growth is expected to return this year, with output forecast to expand by 0.3%. This is where the DBRB comes in. One of the country’s five largest lenders, it posted earnings of $79.6m in the third quarter of 2015, ranking the financial institution second in terms of profitability only to Belarusbank.
The government injected $950m into the development bank in 2012 and 2013 and has continued to fund it strongly. It has since become one of the fastest growing and most financially secure development institutions in the world, boasting a capital adequacy ratio of 37% and a non-performing loan ratio of 5.8% at the end of 2015. Its long term foreign and local currency credit is ranked B- by both Fitch Ratings and Standard & Poor’s.
But where the bank truly excels is in terms of its service to the country. It supports education, sports, the arts and culture and has channelled funds to major infrastructure projects — a new ring road around Minsk, a light rail service beneath the capital — and to the dairy sector, a key employer.
It has fast become the nation’s chief provider of export finance, with a 90% market share, aiding the export of Belarusian heavy equipment to Singapore, Mongolia and Cuba and it hopes to finalise its first co-lending programme with the World Bank in the second half of 2016. A representative office in London and a credit programme supporting privately run local small and mid-sized enterprises approved by the World Bank point to the ambitions of one of emerging Europe’s most needed and best run new development institutions.