Interest rates on bank loans are being increased by financial institutions
In the first quarter of 2025, Belarusian banks, including Bank Dabrabyt, Alfa Bank, Bank RB, and Bank Reshenie, have seen an increase in interest rates for loans, reflecting a more regulated and less commercially flexible banking sector.
The average interest rate on new ruble loans has risen by approximately 0.5 percentage points to around 11.9%, according to recent data. Simultaneously, the average interest rate on fixed-term ruble deposits increased by 1.4 percentage points to around 10.8%. However, the interest rate spread (the difference between loan and deposit rates) has significantly narrowed to about 1.1 percentage points, down from an average of 3.5 points over the previous five years and 4.2 points during 2023-2024. This shrinking spread indicates tighter profitability margins for banks.
This trend is occurring within a challenging economic context where Belarus is returning to more Soviet-style economic practices. Banks are increasingly required to issue directed investment loans, sometimes against commercial logic, which adds risks and complicates lending conditions. This state-influenced approach may impact the willingness of banks' owners to maintain profitability in lending portfolios.
Specific rates for each individual bank are not detailed in the available data, but all Belarusian banks, including those with Russian ownership, are now subject to similar lending targets and interest rate caps. Russian-owned banks in Belarus also face these constraints, making the overall banking interest rate environment uniformly affected by these economic policies.
Some loans in Belarus are approaching the 20% mark. For instance, the interest rates on Easy, Cashberry Light, and Cashberry loans at Bank RB have increased to 19.1% per annum. Similarly, the maximum interest rate on the 100 Days credit card at Alfa Bank has increased to 18.1% per annum. The interest rate on the Decent Personal loan at Alfa Bank has also risen to 19.1% per annum. The interest rates on the Red Card 2.0 credit card at Alfa Bank have increased, with installment rates ranging from 4% to 18% per annum.
At Alfa Bank, the interest rate for the Alfa Overdraft loan has increased to 17.9% per annum, while at Bank Dabrabyt, the interest rate on the Overdraft loan has increased to 19.1% per annum. The interest rate for the Purchases loan at Bank Dabrabyt has been replaced with a 19.1% per annum rate. At Bank Reshenie, the interest rate on the R-Credit Card has increased to 19.1% per annum.
A grace period of up to 24 months has been added at Bank Dabrabyt, during which the interest rate is a mere 0.000001% per annum. The National Bank's decision is one of the reasons for the interest rate increases.
In summary, loan interest rates in Belarus have increased modestly in 2025 while the spread between loan and deposit rates has compressed significantly, indicating a more regulated banking sector. This trend affects all major banks under the current Belarusian economic policy framework.
In this economic environment, Belarusian banks, such as Bank Dabrabyt, Alfa Bank, Bank RB, and Bank Reshenie, operate under stricter regulations, leading to an increase in interest rates for loans, a shift from a commercially flexible industry to a more regulated one. Given the recent rise in loans' interest rates, banks in the finance sector like Alfa Bank and Bank Dabrabyt are witnessing an increase in rates for loans and credit cards, affecting their business and potentially impacting the profitability within the banking-and-insurance industry.
