Just like the rest of the country, the Belarusian banking sector has faced significant upheaval over the past 18 months, and the crisis which gripped its economy in 2011 did not leave the financial institutions untouched. Many institutions suffered losses under International Financial Reporting Standards as a result of the hyperinflationary status assigned to Belarus, according to figures from Austrian bank Raiffeisen.
At the same time, drastic currency devaluation also led to a major weakening of capital adequacy ratios (CARs) in Belarus, which fell from 20.5% in January 2011 to 14.9% at the end of November, according to the International Monetary Fund (IMF). As a result, some banks failed to comply with the minimum of 14% during the first two years of operation and 10% thereafter, according to Andrei Baiko, deputy head of the National Bank of the Republic of Belarus’s (NBRB's) banking supervision directorate.